SEOUL, South Korea (AP) — Global markets are higher Friday with Asian stocks bouncing back as investors responded with calm to increased U.S. tariffs on Chinese imports that took effect midnight Washington time.

European stocks opened with gains. Britain’s FTSE 100 added 0.1 percent to 7,612.08 while France’s CAC 40 advanced 0.4 percent to 5,388.45. Germany’s DAX gained 0.2 percent to 12,491.95. Futures augured a lackluster start on Wall Street. S&P futures added 0.1 percent while Dow futures stayed nearly flat.

Asian markets erased earlier losses to finish mostly higher as the uncertainty ended over whether Washington would escalate tensions with Beijing. Upbeat economic data and overnight gains on U.S. stock markets helped temper concerns, though trading volume was light.

After falling as much as nearly 1 percent, China’s Shanghai Composite Index finished 0.5 percent higher at 2,747.23. The Shanghai benchmark had languished recently, losing more than 12 percent over the past two weeks.

Hong Kong’s Hang Seng index gained 0.5 percent to 28,315.62, while South Korea’s Kospi added 0.7 percent to 2,272.87. But markets in Taiwan, Singapore and other Southeast Asian countries were lower.

Tokyo’s Nikkei 225 jumped 1.1 percent to 21,788.13 in what appeared to be a technical rebound after a four-day losing streak. Australia’s S&P-ASX 200 rose 0.9 percent to 6,272.30.

“The market actually is acting very calmly,” said Francis Lun, chief executive of GEO Securities Ltd. in Hong Kong. “But of course, the talk of a trade war already depressed the market for about 1,000 points in the past month already.”

As of Friday, the U.S. imposed a 25 percent tariff on $34 billion worth of Chinese imports.

China said it would have to make a “necessary counterattack” but gave no details. It has been expected to strike back with tariffs on a similar amount of U.S. exports including soybeans.

“The Trump administrations trade war is finally upon us,” said Stephen Innes, Asia-Pacific head of trading at OANDA. “If this moves off the tit-for-tat battleground into a full out trade war, it will not only threaten market stability but could compromise relations between Washington and Beijing.”

Benchmark U.S. crude was flat at $72.94 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.20, or 1.6 percent, to settle at $72.94 per barrel Thursday. Brent crude, used to price international oils, lost 14 cents to $77.25 per barrel in London. It slid 85 cents, or 1.1 percent, to close at $77.39 per barrel on Thursday.

The dollar weakened to 110.59 yen from 110.60 yen while the euro rose to $1.1712 from $1.1691.

___ – Here are the top five things you need to know in financial markets on Friday, July 6:

1. China accuses U.S. of beginning largest trade war ever

U.S. tariffs on $34 billion worth of Chinese goods went into effect at 12:01AM ET (4:01 GMT) on Friday and China quickly retaliated, according to state media reports.

U.S. President Donald Trump indicated late Thursday that another $16 billion are expected to go into effect in two weeks, with an additional $200 billion currently in abeyance and that he gave instructions to identify a further $300 billion of targets.

China’s Customs Tariff Commission of the State Council previously announced that it would immediately retaliate with additional tariffs for 545 items worth about $34 billion, including agricultural products, vehicles and aquatic products, according to China Daily.

According to the Chinese news agency Xinhua, the retaliatory tariffs for the amount had already gone into effect although the exact details were not specified.

Immediately following the U.S. action, the Chinese Ministry of Commerce said it would be “forced to make a counterattack”. In a statement to Chinese media, the Ministry accused the U.S. of violating World Trade Organization rules and “has set off the largest trade war in economic history”.

2. Jobs report on tap

Coming a day after the minutes from the last meeting of the Federal Reserve showed that policymakers generally supported further increases in interest rates as the pace of U.S. economic growth continued “above trend,” market participants will focus on Friday’s publication of the monthly employment report for June.

The U.S. Labor Department will release the nonfarm payrolls report for June at 8:30AM ET (12:30GMT), and it will be watched more for what it says about wages than hiring.

The consensus forecast is that the data will show jobs growth of 200,000, after adding 223,000 positions in May, while the unemployment rate is seen at 3.8% in June, matching the near 18-year low hit a month earlier.

However, most of the focus will likely be on average hourly earnings figures, which are expected to rise 0.3%, the same gain reported a month earlier.

On an annualized basis, wages are forecast to increase 2.8%, a tad faster than the 2.7% gain in May.

3. U.S. futures show cautious trade amid tariff news

U.S. futures pointed to a slightly lower open on Friday as investors digested trade developments and waited for the latest reading on the American labor market. At 6:03AM ET (10:03GMT), the blue-chip Dow futures fell 51 points, or 0.21%, S&P 500 futures dropped 3 points, or 0.10%, while the Nasdaq 100 futures traded down 11 points, or 0.16%.

Elsewhere, European stocks also reflected a cautious stance, with the major benchmarks hovering around the unchanged marke.

Earlier in Asia, Chinese shares led a recovery, partly helped by the perception that the tariff measures were already priced. Concerns about what lay ahead for global markets did boost appetite for perceived safe-haven assets such as government debt and the Japanese yen.

4. Pound on watch as UK prepares Brexit proposal

The pound was little changed against the dollar on Friday as UK Prime Minister Theresa May gathered with her cabinet to agree on a government “white paper” which will lay out the British proposal for its relationship with the European Union when it leaves the bloc next March.

May is reportedly seeking to maintain close ties with the EU in the interest of business, but is facing staunch Brexiteers who insist on regaining British sovereignty. The gathering began at 5:00AM ET (9:00GMT) and is expected to last all day with plans to publish a final proposal on Monday.

Analysts seem to believe that sterling will remain range-bound in the run up to the final exit, but that it should gain ground when the departure becomes official.

A Reuters poll of around 70 strategists taken this week concluded that the median forecast was for the pound to have moved little from $1.32 in three and six months.

However, they believe sterling will rise to about $1.39 a year from now.

5. Oil prices head for weekly loss ahead of U.S. production data

Oil prices traded lower on Friday, extending weekly losses, as investors watched trade developments and looked forward to weekly data on U.S. drilling activity.

U.S. crude oil futures lost 0.19% to $72.80 at 6:04AM ET (10:04GMT), while Brent oil fell 0.68% to $76.86.

As part of China’s retaliatory response to the U.S., Beijing has threatened a 25% tariff on U.S. crude imports. That could make American crude shipments to China -calculated to be about 400,000 barrels per day, uncompetitive.

West Texas and Brent were both heading for weekly declines of 1.3% and 3.2%, respectively. Also weighing on prices this week was a ramp up in imports led to an unexpected build in U.S. crude supplies.

Net U.S. crude imports rose by 1.4 million barrels per day (bpd), while refinery operations slipped to 97.1% of capacity from 97.5% a week earlier, the EIA said on Thursday.

Inventories of U.S. crude rose by 1.245 million barrels for the week ended June 30, confounding expectations for a draw of 5.20 million barrels, according to data from the Energy Information Administration (EIA).

Later on Friday, traders await the latest Baker Hughes’ data on U.S. production. The number of active U.S. rigs drilling for oil fell by four to 858 last week. That was the second-straight weekly drop in rig counts, raising investor hopes that the rampant pace of domestic output could be slowing at a time of rising global demand.