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Markets tumble after Trump's 'tariffs' bombshell

Markets tumble after Trump's 'tariffs' bombshell

A delegation of top Chinese officials is scheduled to come to Washington on Wednesday to resume negotiations, and a Chinese spokesman said Monday that there are no plans to call off the trip. But he threatened to hike the tariffs on some imported Chinese goods from 10 percent to 25 percent, and he simultaneously threatened to hit the remaining untaxed Chinese imports with a new round of 25 percent tariffs.

President Trump's latest threat to set higher tariffs on imports from China is raising new fears about the ongoing trade talks with Beijing and sending global financial markets tumbling.

"In talks last week in Beijing, Chinese officials told their US counterparts they would not agree to a trade deal that required changes to Chinese law, the people said".

Any sign of an escalation in the months-long trade war is nearly sure to roil financial markets, which have reacted sensitively to developments in the talks between the world's two largest economies.

Futures on the S&P 500 Index slid 1.8 percent as of 11:15 a.m.in Hong Kong.Contracts on the Nikkei 225 Stock Average fell 2.3 percent in Chicago.China's CSI 300 Index tumbled 5.3 percent, the most since October on an intraday basis.

Prior to the tweets from the President of the United States, the global market volatility was particularly low. Beijing has imposed penalties on $110 billion of American goods.

"The president is, I think, issuing a warning here, that, you know, we bent over backwards earlier, we suspended the 25% tariff to 10 and then we've left it there". -China Business Council. He said the Chinese public might "view this as a capitulation" if Beijing reached an agreement before Trump's Friday deadline. "It's going to mean that investors will be very focused on the trade issues even beyond China", with a review of USA auto-import tariffs still pending, she said.

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Hong Kong's Hang Seng index sank 2.9 per cent to 29,209.82. 'The Tariffs paid to the U.S. have had little impact on product cost, mostly borne by China. He said that he believed talks were progressing too slowly and the tariff increase could happen "shortly". Companies that import goods or parts from China may or may not pass on costs to consumers, but they usually act to offset rising costs somehow, including potential job cuts.

"President Trump threatens China while he seemingly doesn't understand how tariffs work".

"China isn't likely to make concessions that the USA want with a big stick hanging over its head", said Zhou Xiaoming, a former Ministry of Commerce official and diplomat.

On Friday, Trump said talks with China were going well.

It's not clear, she said, whether the threat was a shift in position or a negotiating tactic.

The two countries have been trying to resolve disputes over intellectual property theft and forced technology transfers. People familiar with the matter said China is preparing to stabilize the equity market if needed, while at least one large bank offered to sell the dollar as the yuan fell, according to traders.

Trump said tariffs on $200bn of goods would increase to 25 percent on Friday from 10 percent, reversing a decision he made in February to keep them at the 10 percent rate after progress between the two sides.