U.S. President Donald Trump has threatened to escalate the trade conflict with tariffs on as much as $450 billion worth of Chinese goods if China retaliates, with the row roiling financial markets including stocks, currencies and the global trade of commodities from soybeans to coal.
The United States is set to impose tariffs on US$34 billion of Chinese imports from 0401 GMT on Friday (12:01pm Singapore time) and has warned it may ultimately target over US$500 billion worth of Chinese goods, or roughly the total amount that the United States imported from China a year ago.
China rejected "threats and blackmail" ahead of planned USA tariff hike, striking a defiant stance Thursday in a dispute companies worry could flare into a full-blown trade war and chill the global economy.
China is warning that it's prepared to impose its own 25% retaliatory tariffs on 545 USA products such as California wine, meats, nuts and agricultural products.
The United States "will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology", the White House said in a statement.
A member of China's central bank monetary policy committee, Ma Jun, said today that the first punches will have a "limited impact" on the Chinese economy.
With only US$130 billion in U.S. imports to retaliate against, Beijing has said it will take "qualitative" and "quantitative" measures against the United States, triggering fears it could cripple the operations of USA multinationals in China. "We can expect job losses and a decline in investor and consumer confidence", longtime Beijing-based attorney James Zimmerman tells NPR's Rob Schmitz. Asian equities wobbled but also managed to end up.
Flags of U.S. and China are placed for a meeting between Secretary of Agriculture Sonny Perdue and China's Minister of Agriculture Han Changfu at the Ministry of Agriculture in Beijing, China June 30, 2017.
White House trade officials say the current strength of the U.S. economy means Washington can withstand more pain than its rivals if the battle escalates further. He said that would rise to a full 4 per cent of the global total if Washington, Beijing and other governments follow through on tariff threats.
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A Chinese ministry spokesman said the "US is shooting itself in the foot and hurting the world" with its tariff hikes.
Donald Trump's trade war could potentially drag in products from other American trade partners, undermining relations.
The US will levy a 25 percent tariff on more than 800 Chinese product categories worth around $34 billion and has warned of more to come if China retaliates.
China also has plans for a second round - but no start date - that would affect $16 billion of such United States goods as chemicals, coal, crude oil and medical devices.
The official newspaper China Daily accused the Trump administration of "behaving like a gang of hoodlums" who could do damage to the global economy unless other countries stop them.
"Its unruliness looks set to have a profoundly damaging impact on the global economic landscape in the coming decades, unless countries stand together to oppose it".
A staff member walks past U.S. and Chinese flags placed for a joint news conference by U.S. Secretary of State Mike Pompeo and Chinese Foreign Minister Wang Yi at the Great Hall of the People in Beijing, China June 14, 2018.
U.S. Customs and Border Protection will collect 25 percent duties on a wide range of Chinese items, including cars, computer disk drives, and parts of everything from valves to printers, but leaves cellphones, as well as footwear untouched.