Trump escalates trade war with China

US targets $300B of Chinese goods for new tariff hikes

US targets $300B of Chinese goods for new tariff hikes

The U.S. imported nearly $540 billion in Chinese goods in 2018, while the U.S. exported $120 billion, a trade imbalance that Trump is seeking to even out with imposition of the tariffs.

The United States has declared war on China in all but name, with President Donald Trump intent on regaining American primacy he says was forfeited by his predecessors Barack Obama and George Bush, a Democrat and a Republican.

Trump said he'll meet his Chinese counterpart at next month's G-20 summit, an encounter that could prove pivotal in reaching a deal that prevents the deepening clash from doing even more damage to the global economy.

On May 5, Trump tweeted that he would raise a 10% tariff rate on China up to 25%, ahead of a week that was supposed to further trade re-negotiations between the two countries. "Many companies are leaving China so that they will be more competitive for United States of America buyers... we are the "piggy bank" that everyone wants to raid and take advantage of".

The Dow Jones Industrial average was up 1.28% while the broader S&P 500 was up 1.3%.

Laptops, tablets and phones may be affected by tariffs on goods imported from China. "Our working thesis is that we're going to be in for a period of volatility for most of the next month as we await the G20 meeting". "It will all happen, and much faster than people think!" Farmers are also suffering from extensive flooding that has delayed planting.

"The trade war is driving markets at the moment", said Rory McPherson, head of investment strategy at Psigma Investment Management in London.

Chinese authorities were reacting to President Donald Trump's surprise decision last week to impose punitive duties on $200 billion of imports from China.

USTR said it would hold a public hearing on the tariff list on June 17, with final comments due as little as seven days later. The list includes a wide range of consumer goods, from cellphones and computers to clothing and footwear, but it excludes pharmaceuticals, some specialty compounds and rare-earth minerals.

"However, I think traders might underestimate the consequences if there is no deal and furthermore, tough trade negotiations between the USA and the European Union are still to follow later this year, which could spell new turmoil for stocks". Soybean exports to China collapsed past year when the trade war began, and agricultural exports will be hit harder when, or if, the new tariffs are imposed.

The readings fanned speculation that authorities will unveil another round of pump-priming measures - having wound back on such stimulus in recent weeks following signs of a bounce in the economy - with Shanghai's composite index jumping more than one percent Wednesday.

A representative for a major laptop manufacturer told Tom's Hardware that the company had been spending the past six months studying backup solutions to their current laptop manufacturing in China. "If someone brings the war to us we will fight it until we win", Geng Shuang told reporters at a daily briefing.

Sources have said talks stalled after China tried to delete commitments from a draft agreement that its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.

Trump said he could make a deal with Beijing now, but said he would not be burned again and criticized China for last-minute attempt to renegotiate.

"So you absolutely can't put the hat on China of reversing positions and going back on one's promises", Geng said, adding China had shown goodwill in the talks and kept its promises.

However, the onshore yuan weakened 0.1% to its lowest level since December 27, 2018, trading at 6.8874 per dollar, after the foreign ministry said it hoped the United States would not underestimate China's determination to defend its interests.