The burgeoning US-China trade war has entered a new phase

The burgeoning US-China trade war has entered a new phase

The burgeoning US-China trade war has entered a new phase

But short-term he was optimistic that New Zealand would be clear of immediate fallout from new tariffs.

"History shows that there are various other measures [China] could take to inflict pain on United States companies. including scaled up health, safety and tax checks, delaying the imports of goods, and boycotts", warned Louis Kuijs, the head of Asia economics at Oxford Economics.

He notes that the US imports more from China than China imports from the U.S.

The statement from Trump on Monday said that China's response showed that Beijing had no plans to address the underlying IP theft and required escalation by the US.

"There could actually be a bit of a lift for our exports to China if the Chinese retaliate against the U.S. on dairy beef, wine - these are all things we export to China and we could fill the gap", he said.

At the heart of the dispute is the ballooning trade deficit between the USA and China.

"Most observers outside the Trump administration think that a trade war between the USA and China will lead to losses on all sides", Oxford Economics analysts said in a research note.

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

Although this would indeed badly damage American companies, he says it would have the side benefit of flooding markets with cheaper goods - except in the United States, of course, where such goods would be hit with steep tariffs.

Earlier on Monday, stock markets fell amid fears of further deterioration of US-China trade relations.

The Dow Jones Industrial Average fell 284.82 points, or 1.14 per cent, to 24,702.65, the S&P 500 lost 11.32 points, or 0.41 per cent, to 2,762.43 and the Nasdaq Composite dropped 24.94 points, or 0.32 per cent, to 7,722.09. Anglo-Swiss multinational Glencore is down 2.6 percent, while British technology firm Micro Focus also shed almost three percent.

Trump laid out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including cars, the latest hard-line stance on trade by a U.S. president who has already been wrangling with allies.

It published a draft list of about 1,300 Chinese products slated for tariffs in April.

China's Commerce Ministry on Tuesday criticised the latest threat of tariffs, saying it was an "act of extreme pressure and blackmail that deviates from the consensus reached by both parties after many negotiations, and is a disappointment to the global community".

"If the USA loses its senses and publishes a new list", the statement said, "China will be forced to take comprehensive measures that are both strong in quantity and gravity and will fight back".

Leading the fall in Hong Kong was Chinese telecom giant ZTE, plunging almost 26% and shedding almost two-thirds of its value since striking a deal with the Trump administration to lift a ban on using critical USA components.

Pompeo on Monday described USA actions as "economic diplomacy, " which, when done right, strengthens national security and global alliances, he added.

Traders are moving into the safety of the US dollar and US Treasurys.

Stock markets across the region fell Tuesday, with Shanghai closing down 3.78 percent, its biggest drop in two years, and Shenzhen down 5.31 percent.

The tariffs could affect $50-$60 billion worth of goods and increase trade tensions.

But the situation could be much worse, because China accounts for one-third of Australia's total exports.

The White House hasn't set a date for the imposition of any new tariffs beyond the initial list.

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