Since March, the Trump administration has introduced several waves of tariffs worth tens of billions of dollars against Chinese goods in an effort to rebuild the USA industrial base.
Trump also threatened on numerous occasions to put punitive tariffs on the entirety of Chinese imports to the United States if Beijing enacted retaliatory measures in response to Washington's latest round of duties on US$200 billion of Chinese goods.
Speaking weeks before a highly anticipated face-to-face meeting between US President Donald Trump and his Chinese counterpart Xi Jinping at the G20 summit in Argentina, Cui Tiankai said the US-China relationship, which will mark its 40th anniversary next January, "has made great strides, while also it has had its share of setbacks".
The Nasdaq composite sank 116.92 points, or 1.6 percent, to 7,050.29. Ten percent tariffs on $200 billion in imports that took effect in September are due to increase to 25 percent on January 1. Facebook stock was also down 2 percent, Amazon fell 6 percent, Netflix dropped 5 percent and Google's parent company Alphabet fell 4.5 percent. He can refuse to go along with Trump's demands-allowing him to save face domestically by standing up to America-or he can offer a new deal, giving Trump more fodder for tweets that humiliate China's attempt to work with the U.S.to end the trade war.
American companies operating in China believe that they suffer more from trade disputes than companies from other countries, according to a survey by the American chamber of Commerce, which investigated 219 companies - third of the total manufacturing sector.
The report of a further escalation in the trade row between the U.S. and China unsettled markets again. Trade-sensitive industrial shares rose almost 1.2 per cent in mid-morning trading.
Boeing, which saw its stock gain early Monday, became the leading laggard on the Dow, closing down 6.6 percent and suffering its worst day since February 2016.
Brazil's Bovespa rose in morning trading after far-right politician Jair Bolsonaro was elected president, but it later turned lower and lost 2.2 percent.
The price of USA crude oil dropped 0.8 percent to $67.04 per barrel in NY while Brent crude, used to price global oils, lost 0.4 percent to $77.34 per barrel in London.
Bond prices dipped. The yield on the 10-year Treasury note rose to 3.08 percent from 3.07 percent.
Gold fell 0.1 percent to $1,231.51 an ounce, the biggest fall in a week.