Shanghai, Hong Kong stocks plunge on trade war fears

Shanghai, Hong Kong stocks plunge on trade war fears

In Beijing, China's Commerce Ministry responded swiftly to Trump's latest threat, warning that if the U.S. imposed fresh tariffs, China would have to adopt "comprehensive measures combining quantity and quality to make a strong countermeasure".

President Trump escalated his trade feud with China Monday night, threatening to impose tariffs of 10 percent on another $200 billion worth of Chinese goods.

"Such a practice of extreme pressure and blackmailing deviates from the consensus reached by both sides on multiple occasions", the ministry said in a statement.

Trump said he has an "excellent relationship" with Xi, "but the United States will no longer be taken advantage of on trade by China and other countries in the world".

"Trade between our nations, however, has been very unfair, for a very long time".

On April 3, the White House released a list of 1,300 Chinese products worth $50 billion that could be hit with potential tariffs.

However, business expert Derek Scissors of the American Enterprise Institute says the USA could gain from the dispute.

He said the move would be in retaliation for China's decision to raise tariffs on $50 billion in United States goods.

The Canadian dollar weakened to a one-year low of C$ 1.3237 overnight, before paring some of its losses, as investors anxious about Canada's trade feud with the United States. He notes that the US imports more from China than China imports from the U.S.

Then China followed suit, unveiling 25 per cent duties on US$50 billion in U.S. imports - matching the United States rates.

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"This is just what we predicted: A tit-for-tat trade war has erupted and American families are caught in the middle", said Matthew Shay, president of the National Retail Federation.

Goldman Sachs Chief Executive Lloyd Blankfein said Trump's approach to China on trade may be "bluster". That would encompass roughly 90 percent of the $505 billion worth of goods that China exported to the United States in 2017.

The president asserted in a statement Monday night that China is determined "to keep the United States at a permanent and unfair disadvantage".

"Our view is that these actions are necessary to defend this country and that they are ultimately bullish for corporate America, for the working men and women of America, and for the global trading system", said Peter Navarro, who heads the White House office of trade and manufacturing policy.

He said the USA would impose tariffs on another $200 billion after that if Beijing retaliates. Trump recently ordered tariffs on $50 billion in Chinese goods in retaliation for intellectual property theft.

"Let us not understate the macroeconomic impact [of the trade spat]", International Monetary Fund chief Christine Lagarde warned last week.

"As I've said from the beginning, China will back off its industrial plans only when U.S. trade measures are large and lasting enough to threaten the influx of foreign exchange".

China's trade surplus with the USA past year was about $375 billion.

A screen displays the Dow Jones Industrial Average after the closing bell on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 19, 2018. "They weren't going to unduly harm the consumer".

"I have to point out that USA remarks confused right with wrong and made irresponsible accusations against China to cover up its unilateral and protectionist moves", Chinese Foreign Ministry spokesman Geng Shuang said when asked to comment on Pompeo's statement. "We should be creating more jobs, not wiping them out", said Kip Eideberg, vice President for public affairs and advocacy at the Association of Equipment Manufacturers.

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