Asian stocks extend slide, yen up as Sino-US trade dispute escalates

Scott Sinklier  Newscom

Scott Sinklier Newscom

"Trump is betting that China understands they have more to lose in the tariff war because we import more from them than they do from us".

Because China can apply tariffs to USA goods worth only $130 billion, Beijing will have to find other ways to execute a proportional response. "It undermines the interests of the Chinese and American people, the interests of companies and the interests of the people all over the world", the spokesperson added.

"If the U.S. 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".

It gave no details.

FILE - U.S. President Donald Trump signs a memorandum on intellectual property tariffs on high-tech goods from China, at the White House in Washington, DC, U.S., March 22, 2018. "The trade relationship between the United States and China must be much more equitable", he said.

In early trading, stocks in France, Germany and the United Kingdom also fell, while Asian markets also declined. The Shanghai Composite Index was down 3.7 percent at midday while Tokyo's benchmark was off 1.7 percent.

Two decades ago, China's economy was largely fuelled by exports, but it has made progress in rebalancing towards domestic investment and consumption since the global financial crisis erupted last decade - limiting the damage trade tariffs could inflict on Beijing. The ministry also expressed its disappointment that the new tariffs do not reflect the "consensus" the two countries had come to during recent trade negotiations, after which China declared the trade war was over.

But Beijing's mention of "comprehensive measures" suggests that it would go beyond tariffs, said Jake Parker of the U.S.

By Beijing's own calculations, the value of United States product imports past year was US$154 billion. Apple and the White House were not immediately available for comment.

Chinese regulators also have the option of broadening their retaliation by tying up American companies in tax or anti-monopoly investigations or by denying or revoking licenses.

Mr. Navarro said China is seeking by 2025 to control 70 percent of US industries such as aerospace, agricultural machinery, artificial intelligence, biotech, business application software, electronics, new generation IT, precision farming, robotics, and satellite communications.

China's Commerce Ministry said it would respond with tariffs "of the same scale and strength" and that any previous trade deals with Trump were "invalid".

Economists warn Washington might be undercutting its negotiating position by alienating potential allies.

The United States has now imposed tariffs on up to $450bn in Chinese goods, out of a total of $500bn. They include electric cars, whiskey and soybeans - a politically and economically vital export of America's heartland, where Trump enjoys support.

The United States and China have the world's biggest trading relationship but official ties are increasingly strained over complaints Beijing's technology development tactics hurt American companies.

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

On Friday, the USA chose to impose 25% tariffs on $50bn of Chinese products.

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