Escalating trade war between US & China sends shock waves through markets

  • Escalating trade war between US & China sends shock waves through markets

Escalating trade war between US & China sends shock waves through markets

China protects its companies in many sectors, especially high-tech.

"As I've said from the beginning, China will back off its industrial plans only when USA trade measures are large and lasting enough to threaten the influx of foreign exchange", he said.

President Trump announced today that he's retaliating for China's retaliation against last week's tariff announcement. "China relationship", Mr. Navarro told reporters, citing the trade imbalance and China's campaign to acquire US technology "by any means necessary".

Two decades ago, China's economy was largely fuelled by exports, but it has made progress in rebalancing towards domestic investment and consumption since the global financial crisis erupted last decade - limiting the damage trade tariffs could inflict on Beijing. China threatened to retaliate, leading Trump to propose broader penalties.

The president asserted in a statement Monday night that China is determined "to keep the United States at a permanent and unfair disadvantage".

Trump issued a statement this evening noting that "unfortunately" China "apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology".

On news of the worsening trade war, the Hong Kong stock market slumped to its lowest in four months with the benchmark Hang Seng Index dropping as much as about 1,000 points before closing 841 points lower at 29,468 on Tuesday.

About 10 minutes into trading, the Dow Jones Industrial Average was down 1.2 per cent to 24,699.90. Boeing dropped 3% and construction and mining equipment maker Caterpillar shed 2.7%.

FILE - U.S. President Donald Trump signs a memorandum on intellectual property tariffs on high-tech goods from China, at the White House in Washington, DC, U.S., March 22, 2018. China's tariffs would target agricultural products, cars and seafood, among other items.

China's commerce ministry immediately responded by saying the United States "practice of extreme pressure and blackmail departed from the consensus reached by both sides during multiple negotiations and has also greatly disappointed global society".

"If the United States loses its senses and comes up with a new list, China will be forced to strike back hard, and launch comprehensive measures that match the U.S. move in quantity and quality", the Chinese Commerce Ministry said in a statement Tuesday.

The president said the tariffs were in reaction to China's decision to place similar import taxes on $50 billion in USA goods. A delegation of Trump officials initially reached a preliminary deal with their Chinese counterparts on a preliminary trade deal that would have postponed the U.S. tariffs in exchange for Chinese purchases of American goods.

However, business expert Derek Scissors of the American Enterprise Institute says the US could gain from the dispute. -China Business Council. Parker suggested that such steps might include delaying or denying licenses required by US companies in China.

"Let us not understate the macroeconomic impact [of the trade spat]", International Monetary Fund chief Christine Lagarde warned last week.

In a recent column, Reuters analyst Clyde Russell noted that USA oil imports into China account for a relatively tiny portion of the total, at 3.5 percent.

The tariffs could affect $50-$60 billion worth of goods and increase trade tensions.

Europe, Japan and other trading partners raise similar complaints, but Trump has been unusually direct about challenging Beijing and threatening to disrupt such a large volume of exports. Apple representatives did not immediately respond to a request for comment on the report. The White House is finalizing a list of $16 billion in additional goods it will sanction later. China buys around $1 billion worth of American sorghum each year.