China blasts new USA tariff threat, warns it will retaliate

China blasts new USA tariff threat, warns it will retaliate

On Monday, Trump directed trade officials to identify an additional $200 billion worth of Chinese goods that will be subject to a 10% tariff if China doesn't back down.

The possible new duties, which could cover the lion's share of all of China's exports to the United States, were a response to retaliatory Chinese levies on up to $50 billion in U.S. goods announced Friday.

China might be unable to match the USA tariffs because it imports much less from the United States - $130 billion in goods previous year, compared with Chinese exports to the United States of $505.5 billion.

Trump's announcement fueled fears that economic losses, limited so far to companies hit by USA or Chinese tariff hikes, might spread if the dispute chills global trade. The Dow Jones industrial average fell 287.26 points, or 1.15 percent, to close at 24,700.21.

Trump said he has an "excellent relationship" with Xi, "but the United States will no longer be taken advantage of on trade by China and other countries in the world".

As the United States and China teeter on the brink of an all out trade war and tit-for-tat tariffs loom, a European businesses lobby is urging Beijing to stop dragging its feet on reforms and using unfair trade policies to pamper Chinese companies. Aerospace giant Boeing fell 3.4 percent and DowDuPont slipped 3.3 percent.

"This practice of extreme pressure and blackmail deviates from the consensus reached by both parties on many occasions and is disappointing for the worldwide community", the Commerce Ministry said in a statement. The Chinese Commerce Ministry responded that it would "strike back hard" with "measures that match the USA move in quantity and quality".

Freeland met last week with Trump's trade czar Robert Lighthizer and spoke to him Monday by phone. Earlier this month, that measure was extended to some of the US' traditional allies - the EU, Canada and Mexico.

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Britain's Prime Minister Theresa May speaks at the Royal Free Hospital, London June 18, 2018. She refused to "tie the hands of government" in ongoing negotiations.

It said the Chinese government is trying to find out whether Trump has the "political strength" to carry out his threats and is pressuring US interests to force him to compromise.

China's economy is already clouded by a sharp slowdown in fixed asset investment growth because of the government's de-leveraging drive, a problematic property sector, mounting debt and rising credit defaults.

The major US index futures are pointing to a higher opening on Wednesday, with stocks likely to regain some ground following the weakness seen in the previous session. Oxford Economics estimates that if Trump imposed the $200 billion in duties and China responded in kind, US growth could slow by 0.3 percentage point next year.

The U.S. imported $505 billion of goods from China past year and exported about $130 billion, leaving a 2017 trade deficit of $376 billion, according to U.S. government figures. US crude oil is up 1.3 percent, after dropping 1.2 percent a day earlier. Companies that make cars, steel and aluminum and chemicals also took heavy losses.

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

In a post illustrated with an unflattering picture of Trump with his hair flying in the wind, the ruling Communist Party's People's Daily said on its WeChat account that China had the confidence and the ability to win the trade battle.

"No one should be surprised", Peter Navarro, Trump's trade adviser, told reporters Tuesday on a White House conference call.

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