President Trump said Tuesday that China's economic exploitation of the US left him with "no choice" but to hit Beijing with tariffs, while the Chinese government warned that it will retaliate for Mr. Trump's "irrational" move, and stock markets plummeted on fresh fears of a trade war. "If the U.S. acts irrationally and issues a list, China will have no choice but to take comprehensive measures of a corresponding number and quality and take strong, powerful countermeasures". It labeled the move "extreme pressure and blackmail", and said it would retaliate with counter measures.
In the first round of penalties announced by both nations, to take effect July 6, the USA plans to impose tariffs of 25 percent on $34 billion of Chinese imports, such as construction machinery, aerospace and power generation equipment. It could delay or deny licenses that American companies need to operate in China.
USA stock markets fell sharply Friday morning, with investors increasingly nervous about the impact of a trade war.
This possible trade war now is threading to create more pressure on the Chinese economy.
"In the global environment - and due in particular to this trade issue - the risks are more on the downward side and a little bit worrying", European Central Bank policymaker Jan Smets said in a CNBC interview.
The White House hasn't set a date for the imposition of any new tariffs beyond the initial list. Trumps Tariffs spread pain to non-Chinese companies.
"None of these efforts by the president and his team have resulted in any progress on the two core issues facing the U.S".
The North Korea-Iran Connection
Trump said that North Korea is 'destroying a major missile engine testing site, ' which would represent a win for America. He took a night-time stroll around some of the country's sights ahead of his summit with US President Donald Trump.
The survey was conducted in February and March, before the latest escalation in U.S.
North American stock markets fell in mid-day trading, with the S&P/TSX composite index falling 50.84 points to 16,332.79.
Retaliation from Moscow could have a more muted impact on the US, however. If implemented, the tariffs would mean a sizable amount of imported Chinese goods would be exposed to new tariffs. "Therefore, these firms will then have to choose between absorbing the higher tariff costs via lower profit margins versus passing them onto consumers". The tariffs were quickly matched by China on USA exports. The state exports about 40 percent of its soybeans, most going to China. Trump must be reminded that trade barriers would not only damage the countries involved, but would also disrupt global supply chains. It injected another 200 billion yuan ($31 billion) into the economy via its medium-term lending facility on Tuesday, pushing its net injections so far in June to the most in any month since December 2016.
Besides, he add, reforms are not only important for foreign companies but China's own economic development as well.
Neither the $200 billion tariff plan announced by Trump earlier this week nor the $50 billion tariffs slapped on USA goods by China last week have mentioned Apple or the iPhone. Beijing wants to "demonstrate that things will be done their way or not at all", said Christopher Balding, an economics professor at Shenzhen's HSBC Business School, who believes Chinese policymakers prefer demonstrations of "power and control" over "technical policy rightness".
In a statement, Mr Trump said he has an "excellent relationship" with Mr Xi, "but the United States will no longer be taken advantage of on trade by China and other countries in the world". Shares of large USA companies with significant overseas business were hit especially hard. Trump has tried to throw a lifeline to ZTE, which has been struggling to survive under USA sanctions.