Stocks began to be traded lower today as a trade war between the USA and the other major economies became a reality after President Donald Trump unveiled new tariffs on Chinese goods. Chinese officials are expected to retaliate in other ways, hitting USA firms in China with unplanned inspections, delays in approving financial transactions and other administrative headaches. It's unclear what that action could include.
The U.S. Trade Representative announced Tuesday a possible second round of tariff hikes targeting a $200 billion USA list of Chinese goods ranging from burglar alarms to mackerel.
Washington on Wednesday announced it was starting the process to slap 10-per cent tariffs on another $ 200 billion in Chinese export goods as soon as September. High-level talks between the two countries starting in May failed to deliver a breakthrough to head off a trade war.
"This is an appropriate response", Robert Lighthizer, the USA trade representative, insisted last night. Only about 1% of the items on the list were consumer goods.
"The Chinese side is shocked by the actions of the USA", it said in a statement, according to a translation by Google.
Last Friday, the U.S. imposed 25% tariffs on Chinese imports worth $34bn (£25bn).
The Trump administration on July 6 imposed 25 per cent duties on US$34 billion in Chinese imports, the first time the president has implemented tariffs directly on Beijing after threatening to do so for months.
China meanwhile said it was "shocked" and warned it would impose countermeasures "to safeguard the core interests of the country and the fundamental interests of the people".