In tit-for-tat, Trump threatens more tariffs against China

Share

President Trump's comment came a day after he threatened to impose tariffs on an additional United States dollars 200 billion worth of Chinese goods, escalating a trade war between the world's two largest economies.

China hit back with tariffs on $50 billion of American products, including agricultural goods. "This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods".

The president warned that he was prepared to hit China with an additional US$200 billion in import taxes unless Beijing capitulates.

China retaliated with $50 billion worth of USA exports, including agricultural products.

"As China hawks, like (Robert) Lighthizer and (Peter) Navarro, appear to have gained power within the Trump administration lately, an all-out trade war now seems more inevitable", said Yasunari Ueno, chief market analyst at Mizuho Securities. It also scrapped agreements to narrow China's trade surplus with the United States by purchasing more American farm goods, natural gas and other products. She also spoke with U.S. Secretary of State Mike Pompeo over the weekend.

Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Mr Trump's watch.

On the other hand, a released statement by China's Ministry of Commerce on Tuesday saying that China will come back with "qualitative" and "quantitative" measures if the tariffs that President Trump announced really applied.

On Wall Street, the Dow Jones Industrial Average closed down 1.1% on Tuesday.

WATCH: Freeland "strong, measured" retaliatory tariffs to be imposed on U.S. Many in the Republican Party, who are more instinctively in favour of free trade, don't think this is the right way to tackle problems with China.

More news: Ex-Trump aide mocks immigrant girl with Down syndrome

Ma Yu, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said, "If the trade war continues, it will make goods produced by both countries less competitive and cause large-scale job losses".

Fox News contributor James Freeman discusses how President Trump's tariffs against China are impacting US stocks.

USA business groups said members were bracing for a backlash affecting all American firms in China, not just in sectors facing tariffs.

-China Business Council in Beijing, said some companies have reported Beijing is meeting with Chinese businesses to discuss shifting contracts for us goods and services to suppliers from Europe or Japan, or to local Chinese firms.

It could also be that he thinks China will run out of U.S. imports against which to retaliate.

In turn, China says their new import taxes are in response to an earlier set of tariffs by the USA, also of $34 billion at a 25 percent rate.

With the world's two largest economies on the brink of a full-fledged confrontation, spooking markets and worrying business leaders, Trump on Monday said he was pushing forward with fresh punitive measures over Beijing's "unacceptable" move to raise its own tariffs.

The White House is also expected to announce restrictions on investments by Chinese companies in the United States by June 30.

"Beijing will not panic in response to Trump's latest threat, but will be deeply concerned", said Eurasia Group in a report.

Share