China trade war fears hit global stock markets hard

Trump escalates China trade war with extra tariffs

The Trump administration, on the other hand, could impose tariffs on up to $400bn of Chinese goods.

The Trump tariffs, which the United States government says are punishment for intellectual property theft, will be enacted in two waves. "China has been taking out $500 billion a year out of our country and rebuilding China".

Beijing has offered to narrow its politically volatile trade surplus with the United States but has resisted changing development plans its leaders see as a path to prosperity and to restoring China's rightful role as a global leader.

The Australian dollar sank to a one-year low of A$ 0.7380 on the escalating U.S.

Either way, even if Trump goes on to impose tariffs on US$300 billion or even US$400 billion of Chinese goods, Beijing could only levy duties on a total of US$100-plus billion of United States products. The Dow Jones industrial average is called to open more than 350 points lower.

"One thing that we've heard specifically from companies is that the Chinese government has been holding meetings with domestic private and state-owned enterprises where they talk about diversifying away from the procurement of U.S. products and services and shifting those contracts to European, Japanese or domestic Chinese companies", Parker said.

Emerging market currencies also came under pressure, with the South African rand shedding 1.9 percent to hit its seven-month low of 13.9150.

The Business Roundtable, representing companies with more than $7 trillion in annual revenue, said the administration's feud with China "will only make it harder to achieve a fair and level playing field for American companies to compete in China".

U.S. President Donald Trump is preparing to go all in on his big bet on tariffs against China.

In the latest move in an escalating trade dispute, President Trump announced Monday evening that he was asking U.S. Trade Representative Robert Lighthizer to suggest $200 billion worth of Chinese goods on which the U.S. could impose a 10 percent tariff.

China's commerce ministry said Beijing will fight back firmly with "qualitative" and "quantitative" measures if the United States publishes an additional list of tariffs on Chinese goods, accusing Washington of launching a trade war.




Neither side has yet imposed tariffs on the other in their growing dispute over technology and the USA trade gap.

The United States had already announced it will impose 25 percent tariffs on $50 billion in Chinese goods beginning in July to punish China for what Trump says are unfair trade practices.

"Most damaging for businesses and investment is perhaps rising uncertainty caused by lasting trade disputes, which could delay or significantly change business and investment decisions", warned economists at UBS. Those tariffs, set to start taking effect July 6, were matched by China's threat to penalize US exports.

The 25 percent duties imposed by China go into effect July 6, and cover high-profile US products such as electric vehicles, soybeans, whiskey, orange juice, lobsters, salmon and cigars.

Even if Americans don't buy these items directly, they could still feel the impact as United States companies raise their prices to help them pay for more expensive machines and industrial goods.

Updated: This article has been updated to add Trump's threat to possibly follow the new round of tariffs on $200 billion of goods with another round.

But Beijing faces challenges in retaliating directly: China ships far more goods to the United States ($505 billion past year, according to U.S. figures) than come back in the opposite direction ($130 billion).

He estimated that USA crop farmers have lost $100 per acre in revenue over the past two weeks in the most rapid erosion of US farm profit since at least 1979 due to the administration's battle with China.

US futures are suggesting that the sell-off will continue when trading opens in NY. Trump also has slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies.

The move quickly drew praise from former Trump senior adviser Steve Bannon, who said: "President Trump told China and the world tonight that America will not back down when it comes to economic aggression".

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