Tit-for-tat tariffs will 'destroy' trade relations with USA, says China

Tit-for-tat tariffs will 'destroy' trade relations with USA, says China

Zenglein added: "When dealing with the USA it is clear that they [China] are more vulnerable and so that forces them to take a different approach". These groups and their GOP members of Congress - previously broadly supportive of Mr. Trump - have begun agitating for the President to ease up in his trade war. The prospect of an worldwide trade war has sent jitters through world markets.

The Trump administration has published a preliminary list of additional Chinese products that could be targeted with tariffs in the escalating trade war between the world's two biggest economies.

The president last month asked the U.S. Trade Representative's office to identify US$200 billion of Chinese goods that could be hit with 10 percent tariffs.

On Friday, the US slapped 25 percent taxes on $34 billion in Chinese imports, a lot of them are industrial goods that the Trump administration says receive subsidies or other unfair support from Beijing.

"The markets still remain sensitive to the trade-related theme, which is something investors have to take into account for the long term", said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management in Tokyo.

China, which imports 60 per cent of the soybeans traded worldwide, bought 32.9 million tonnes from the United States past year, accounting for 34 per cent of the total purchases.

But U.S. Trade Representative Robert Lighthizer said the 10 percent duties, which also cover many consumer products that may also contain unlisted plastics components, are needed to put more pressure on China.

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Wall Street's four-day winning streak ended with a thud on Wednesday (Jul 11) as another round of US-China trade tensions prompted a global stocks selloff. But Trump hasn't backed down, arguing that China's unfair trading practices are hurting American workers.

The additional USA tariffs, which will go through a two-month approval process including a public hearing, come after China retaliated in a tit-for-tat trade skirmish last week. "China has not changed its behaviour - behaviour that puts the future of the USA economy at risk". President Donald Trump has threatened higher tariffs on more than $500 billion of goods, or almost all of China's annual exports to the United States.

However, in a statement this morning the Chinese ministry of commerce hit back, saying: "China is shocked by United States behaviour".

China's WTO "trade policy review" - scheduled before Washington lit the fuse on a tariff battle with Beijing - served as a new front in the widening economic confrontation between the two powers.

Unfortunately for markets, no end is in sight, with further retaliatory levies nearly certain to be enacted by China in the coming days or weeks.

Meanwhile, farmers hurt by Chinese tariffs on US agricultural exports pose a political risk for Mr. Trump and for Republicans, especially as the November midterm elections loom.

The Retail Industry Leaders Association, a lobby group representing the largest U.S. retailers, said: "The president has broken his promise to bring 'maximum pain on China, minimum pain on consumers'".

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