Economy

Traders Move Risk Off The Table Alarmed By Escalating Trade War

Traders Move Risk Off The Table Alarmed By Escalating Trade War

President Trump's comment came a day after he threatened to impose tariffs on an additional Dollars 200 billion worth of Chinese goods, escalating a trade war between the world's two largest economies. This would come in addition to the tariffs on $50 billion worth of imports, should China retaliate; a move which effectively confirms that a damaging trade war is underway, leaving many questioning where the end point will be? "Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship", he said.

The possible new duties, which could cover the lion's share of all of China's exports to the United States, were a response to retaliatory Chinese levies on up to $50 billion in U.S. goods announced Friday.

These include major American exports to China such as soybeans, which brought in $14 billion in sales a year ago and are grown in states that supported Trump during the 2016 presidential election.

"Canada's not going to take advantage of the United States any longer", Trump said.

"Most damaging for businesses and investment is perhaps rising uncertainty caused by lasting trade disputes, which could delay or significantly change business and investment decisions", warned economists at UBS.

Goldman Sachs Chief Executive Lloyd Blankfein said Trump's approach to China on trade may be "bluster".

Mounting concerns over the U.S.

Global markets have sunk due to fears that the United States and China may be veering toward an all-out trade war. Navarro explained it's just a trade conflict, . adding that President Trump has a close personal relationship with his Chinese counterpart.

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.

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Miffed by Pompeo's comments, China hit back saying that U.S. is making allegations to cover up its unilateral protectionist policies.

Navarro reiterated Washington's accusations that China had used a string of unfair practices - cyber-theft, state-sponsored corporate acquisitions, forced technology transfers and export restrictions - to target global dominance in advanced new industrial sectors.

"If they thought that they could buy us off cheap with a few extra products sold and allow them to continue to steal our intellectual property and crown jewels, that was a miscalculation", Navarro said, referring to now-abandoned talks in which Beijing had offered to purchase more USA products.

US business groups said members were bracing for a backlash affecting all American firms in China, not just in sectors facing tariffs.

In April, the Trump administration outlined around 1,300 products worth $50 billion that would be hit with proposed tariffs.

He said China's recent claims of "openness and globalisation" are "a joke".

The US says the new tariffs, which would be set at a rate of 10 percent, are in response to tariffs from China last week on $34 billion in US goods at a 25 percent rate.

"Dairy", Trump said. "Dairy, 275 per cent tariff".