China on Wednesday said tit-for-tat tariffs will "destroy" trade between the world's top two economies, after Washington fired the next shot in a ballooning trade war, readying fresh levies on $ 200 billion in Chinese goods.
Tuesday's announcement is the latest move by Trump in his America First protectionist agenda that has also seen the USA target Canada, the European Union and Mexico, who have also hit back with their own measures, sparking global trade war woes. It's unclear what that action could include.
Trade Representative Robert Lighthizer on Tuesday released a list of thousands of additional goods that could face 10% tariffs after a public comment period.
Head of U.S. equity strategy at JP Morgan, Dubravko Lakos-Bujas, said: "Despite trade headlines, S&P 500 companies should deliver robust earnings on above-trend revenue growth and sharply higher margins".
It also said that China would have to respond to the USA actions.
Just when the Dow Jones seemed poised to break past 25,000, news of an extra $200 billion in tariffs on China knocked it back down, and the media is in an absolute frenzy.
Yu Xubo said in the interview that China can increase soybean imports from South American countries amid an escalating trade dispute with the United States that has seen the world's two biggest economies impose new import tariffs on each other's goods. "This new round of proposed tariffs takes the fight onto yet another level from which it is going to be hard for either side to make a graceful retreat", said Eswar Prasad, former head of the International Monteary Fund's China division.
The USTR said the latest action was in response to Beijing's failure to change its policies and its retaliatory duties.
The foreign ministry described Washington's threats as "typical bullying" and said China needed to counter-attack to protect its interests.
The tariffs will not be implemented immediately but will go through a 2-month review process. His determination to renegotiate trade deals has targeted not only competitors on the world market such as China, but longtime friends and allies such as the European Union or Canada.
"At the same time, the trade dispute can easily be blamed for a variety of ills".
The government gave no details but the Commerce Ministry earlier threatened "comprehensive measures".
"The behavior of the United States is hurting China, hurting the world, and hurting itself", the ministry said in a statement, adding that it was "shocked" by U.S. actions.
Senate Finance Committee Chairman Orrin Hatch called it "reckless", adding that the tariffs were "not a targeted approach".
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