Published: Wed, June 20, 2018
Markets | By Otis Pena

President Trump Not Stepping Back, New Tariff Thread for China

President Trump Not Stepping Back, New Tariff Thread for China

"China has been taking out $500 billion a year out of our country and rebuilding China".

The Dow and S&P were modestly lower on Monday, having recovered from earlier lows, as gains in energy shares helped curb declines stemming from trade war concerns after China's retaliation to United States tariffs.

China said Tuesday it would respond with "comprehensive measures" that could target American companies, sending global markets into a nose dive. It called Mr. Trump's tariff threat an "act of extreme pressure and blackmail" that "deviates from the consensus reached by both parties after many negotiations, and is a disappointment to the worldwide community".

Although Mr. Trump's audience applauded his comments on tariffs at the annual National Federation of Independent Business conference, the renewed trade hostilities between Washington and Beijing are spooking many sectors of the USA economy, from Wall Street to the agricultural heartland. But the lopsided status of U.S.

The Dow Jones Industrial Average dropped 287.26 points (1.15 per cent) to 24,700.21.

If Intel makes a chip at its USA plants in Oregon, Arizona or New Mexico, then sends it to China for low-level assembly work and then brings it back so it can be put into a device manufactured in the United States, the chip would get hit by the tariff.

The S&P energy index rose 1.2 percent and was poised to snap a six-session losing streak.

He said China's latest action clearly indicated its determination to keep the U.S. at a permanent and unfair disadvantage, which is reflected in the massive Dollars 376 billion trade imbalance in goods.

"The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the US, but of the world", the ministry said in a statement.

The White House said that if China goes through with its promise to retaliate against the U.S. tariffs announced last week, the United States will impose tariffs on an additional Dollars 200 billion worth of Chinese goods. Trump agreed to end a ban on the sale of US parts to Chinese telecommunications firm ZTE, while celebrating China's offer to increase its importation of American farm products as a major trade victory.

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The U.S. tariff hikes imposed so far affect a total of about $109 billion of imports, according to Morgan Stanley. None of the tariffs could take effect for 60 days.

"The fundamental reality is that talk is cheap", Navarro told reporters on a conference call, again accusing China of "predatory" trade policies.

Speaking to a gathering of small business owners in Washington, Trump again blasted the North American Free Trade Agreement, saying the USA can no longer afford to be the "stupid country".

Mr Trump has threatened to put tariffs on an extra $200bn (£141bn) of Chinese goods, sparking fears of a trade war.

United States business groups said members were bracing for a backlash from the Chinese government that would affect all American firms in China, not just in sectors facing tariffs.

"I understand that there's going to be concern about what the impact might be, both on the financial markets and on the global economy", he said.

"The trade dispute is escalating at a time when doubts about the domestic economic picture are rising", Mark Williams, chief Asia economist at research firm Capital Economics, wrote in a research note last week.

He also added the actions are (quote) "necessary to defend" the U.S. "This is a trade dispute - nothing more, nothing less".

"China can not have 70 percent of production of these industries by 2025", he said.

Dan Boylan contributed to this article, which is based in part on wire service reports.

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