Latest US-China trade spat hits US stocks

Trump Announces New Taxes on TVs and Air Conditioners

US prepares to impose new tariffs on additional $200B worth of Chinese goods

Washington on Tuesday announced it was starting the process to slap 10-percent tariffs on another $200 billion in Chinese export goods as soon as September.

French said. "The way things are shaping up, it may be too late, but we hope the administration changes course before we lose the momentum from tax and regulatory reform and return to an era of high prices, job loss and negative growth in our economy". "To protect the core interests of the nation and its people, the Chinese government will be forced to impose necessary countermeasures". That came four days after Washington added 25 percent duties on $34 billion worth of Chinese goods and Beijing responded by increasing taxes on the same amount of American imports. That prompted fears Beijing might go beyond matching USA import tax increases by harassing American companies in China.

"Rather than address our legitimate concerns, China has begun to retaliate against USA products", Lighthizer said in a statement.

But China has rebuffed USA complaints and denied any harm was done to US companies, and instead retaliated "without any worldwide legal basis or justification", Lighthizer said.

Stock markets around the globe fell as the latest USA announcement and the Chinese response indicated a deepening and protracted trade conflict between the world's two largest economies that could hit global trade and growth. Hong Kong's Hang Seng lost more than 1 per cent, as did Japan's Nikkei as the yen received something of a safety bid.

The Dow Jones tumbled 219 points, or 0.9 per cent, to 24,700.

In the U.S., some lawmakers and business groups criticised the latest USA move.

Republican Speaker of the House Paul Ryan consented that China is indeed playing unfairly but said that, "I don't think tariffs are the right way to go".

Trump has said continuously that China has taken advantage of the United States economy, and he has vowed to hit almost all the country's products with tariffs, as much as $450bn.

"Concerns over trade and trade wars are really having an adverse effect, less so on the US markets than the global markets, but it is certainly taking a bite".

The US Chamber of Commerce has supported Trump's domestic tax cuts and efforts to reduce regulation of businesses, but it has been critical of Trump's aggressive tariff policies. China immediately retaliated with tariffs on its own list of $34 billion worth of American goods.

But the US action drew a swift reaction from the plastics and petrochemical industries, with the head of the Plastics Industry Association saying the tariffs would "boomerang" and hurt manufacturing.

Home furnishing retailers are expected to be hit particularly hard because China supplies 65 percent of US furniture imports, according to analysts at Goldman Sachs.

The offshore yuan was at 6.6848 per dollar at 0831GMT after hitting a low of 6.6918, down almost 0.5 percent on the day, at one point in early Asian trade.

"It is impractical for China to match tariffs by quantity", said Frances Cheung, head of Asia macro strategy at Westpac in Singapore.

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