US President Donald Trump has threatened new tariffs on Chinese imports, raising fears of an escalating trade war. Trump threatened further sanctions should China — which accuses the US of "blackmail" — retaliate.
The US president said he had asked officials to target $200 billion (€172 billion) worth of imports — and threatened to increase taxes on Chinese exports to the US even further should he meet resistance from Beijing.
The proposed measures caused upset on global stock markets on Tuesday, initially weakening both the US dollar and the Chinese yuan.
The Hong Kong bourse fell 3.1 percent, while Shanghai was down 3.8 percent, its lowest level since mid-2016. Tokyo was 1.8 percent lower while Seoul was down 1.5 percent. In early European trade London fell 0.8 percent, Paris 1.3 percent and Frankfurt was 1.5 percent down.
Trump cited China's imposition of charges on US goods — which came in response to Washington's opening salvo in a mounting trade dispute — as "unacceptable."
"This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods," said the US president.
In addition to the $200 billion worth of goods to be targeted by the Office of the US Trade Representative, Trump said a further $200 billion would be hit with tariffs if China responded in kind.
A central concern of the US administration — and the reason for the initial sanctions — was alleged intellectual property theft by Chinese firms.
China's commerce ministry condemned the announcement, saying the US was engaging in a "practice of extreme pressure and blackmail."
"If the US 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."
Soybeans and automobiles
Last week, Trump announced 25 percent tariffs on $50 billion in Chinese goods, which prompted Beijing to respond by quickly announcing new duties on US goods.
China initially targeted 545 US products valued at $34 billion, including soybeans — a major US export to China — as well as other agricultural products and cars. It also drew up a list of $16 billion worth of energy and chemical products to impose at a later date.
It was initially unclear when the new US tariffs could be put in place, with officials still to identify which Chinese goods would be targeted. The first round of punitive tariffs by both countries is set to take effect July 6.
The US tariffs on Chinese good are only one component of Trump's trade offensive as part of his "America First" agenda. Steel and aluminum tariffsof 25 percent and 10 percent, respectively, have been imposed on imports to the US, including those from economic partners such as the EU and Canada.
rc/kms (AFP, AP, Reuters)