Donald Trump ratchets up China trade dispute with new tariffs

Oil looking oversold heading into latest OPEC meeting

Donald Trump ratchets up China trade dispute with new tariffs

China warned Tuesday it will retaliate against President Donald Trump's latest tariff threat, fueling fears their escalating dispute could harm global trade and economic growth.

The US leader warned he would go even further, with punitive measures on an extra $200 billion of Chinese goods - for a possible total of $450 billion of goods, or most Chinese imports - "if China increases its tariffs yet again".

Last week Trump ordered a 25 percent tax on United States dollars 34 billion in Chinese imports and Beijing matched that total.

The fact that America imports more from China will make it harder for Beijing to match Trump's attacks, according to Derek Scissors, a resident scholar at the conservative American Enterprise Institute in Washington who focuses on China.

Mr. Trump recently ordered tariffs on $50 billion in Chinese goods in retaliation for intellectual property theft.

China responded with a 178.6 percent tariff on all imports of sorghum to the United States. Technology companies such as Apple have complained about infringement of their innovations while increasingly depending on foreign labor to manufacture their products, issues the USA has worked unevenly with China to resolve.

"If the US side becomes irrational and issues a list, China will have to adopt comprehensive measures combining quantity and quality to make a strong countermeasure", the ministry said.

When you consider the number of jobs that Apple is responsible for in the country, and how highly the iPhone is thought of in China, we'd expect the device to be kept out of the trade war by China, too.

The U.S. has also imposed tariffs this year of 25 percent on steel and 10 percent on aluminum from a wide range of nations, including China.

Reuters reported on Monday evening that the US Senate passed a defence spending bill that contained clauses to kill Trump's ZTE deal.

More news: Rapper XXXTentacion shot, critically injured

Trump's announcement fuelled fears that economic losses, limited so far to companies hit by US or Chinese tariff hikes, might spread if the dispute chills global trade.

Trump's tariffs target goods the White House says benefit from industrial policies that China's trading partners say violate its market-opening pledges.

"We don't want a trade war, but we're not afraid of a trade war, " ministry spokesman Geng Shuang said.

The problem for Beijing now, however, is that by raising the tariff stakes to 10 per cent on US$200 billion worth of goods, Trump has put any like for like retaliatory move out of China's reach, as it simply does not buy that amount of American goods.

FILE PHOTO: FILE PHOTO: The label of a Washington D.C. sweatshirt bears a U.S. flag but says "Made in China" at a souvenir stand in Washington, DC, U.S., January 14, 2011.

Isaac Boltansky and Lukas Davaz, analysts at the research and trading firm Compass Point, said the Chinese could use some out-of-the-box thinking to strike against the United States, including "stalled regulatory approvals, brand boycotts, and currency devaluation". That being said, "China is going to retaliate", he added.

"If the United States loses its senses and comes up with a new list, China will be forced to strike back hard, and launch comprehensive measures that match the USA move in quantity and quality", the Chinese Commerce Ministry said in a statement Tuesday.

US business groups said members were bracing for a backlash that would affect all American firms in China, not just in sectors facing tariffs.

The Dow Jones was down more than 300 points, or 1.6%, at the open after Asian and European markets fell sharply earlier. "This is unacceptable", Trump said.

Últimas noticias