Trump Moves to Retaliate Against China's Retaliation for New Tariffs

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The list was created using a computer algorithm that chose products to hurt Chinese exporters while limiting the impact on USA buyers. In a forcefully worded statement, it said Beijing is ready to "defend the interests of the Chinese people and enterprises".

"If the US becomes irrational and issues this list, China will have no choice but to adopt strong countermeasures of the same amount and quality, " the ministry statement said.

It gave no details.

Trump's latest salvo in a brewing trade war would mean a sizable amount of Chinese goods shipped to the USA would be exposed to tariff threats and raises new questions about the impact on American consumers.

"Asian currencies and stocks are feeling most of the impact compared to Europe but that could quickly change if this escalates", said fund manager Constantin Bolz of German-based wealth management firm Portfolio Concept. The benchmark index of Chinese stocks fell nearly 4 per cent, other Asian share markets declined and USA equity futures traded lower, while safe havens including the yen, gold and Treasuries climbed.

FILE PHOTO: FILE PHOTO: The label of a Washington D.C. sweatshirt bears a U.S. flag but says "Made in China" at a souvenir stand in Washington, DC, U.S., January 14, 2011.

Global markets are volatile as the prospects for a trade war have intensified. Technology companies such as Apple have complained about infringement of their innovations while increasingly depending on foreign labor to manufacture their products, issues the USA has worked unevenly with China to resolve.

President Trump announced today that he's retaliating for China's retaliation against last week's tariff announcement. That would encompass roughly 90 percent of the $505 billion worth of goods that China exported to the United States in 2017.

Chinese regulators also have the option of broadening their retaliation by tying up American companies in tax or anti-monopoly investigations or by denying or revoking licenses.

Dollar and stocks drop as Trump hits China with tariffs
US crude fell 0.3 percent to $66.44 per barrel and Brent was last at $75.95, down 1.03 percent on the day. Tokyo ended 0.5 percent higher and Sydney added more than one percent.

United States president has asked to target $200b worth of imports for a 10% levy.

Economists warn Washington might be undercutting its negotiating position by alienating potential allies.

The declines came after a series of moves escalating the brewing trade war between the United States and China, the world's two largest economies.

The ongoing trade dispute between the United States and China knocked the yuan to 6.4660 per dollar, its weakest in more than five months in the offshore market.

On Friday, I announced plans for tariffs on $50 billion worth of imports from China. China's Commerce Ministry criticized the White House action as blackmail and said Beijing was ready to retaliate. Trump slapped tariffs on steel and aluminum from Canada, Mexico and the European Union, threatened to kill the North American Free Trade Agreement and is studying new tariffs on auto imports.

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.

Harvard Economics Professor Martin Feldstein on President Trump's trade negotiation strategy.

"The fundamental reality is that talk is cheap", Navarro told reporters on a conference call, saying China "may have underestimated the strong resolve of President Donald J. Trump".

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