China labels Trump tariff threat as ‘extreme pressure and blackmailing’

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Yesterday (June 18), the Trump administration threatened new tariffs on $200 billion of imported Chinese goods each year. In a forcefully worded statement, it said Beijing is ready to "defend the interests of the Chinese people and enterprises".

"If the US becomes irrational and issues this list, China will have no choice but to adopt strong countermeasures of the same amount and quality, " the ministry statement said.

It gave no details.

The US president said in a White House statement on Monday evening that he had instructed the US Trade Representative's office to identify $200 billion in imports from the Asian nation for additional tariffs of 10 percent.

Trade-sensitive companies like Boeing Co. and Caterpillar Inc., China-exposed stocks like Acacia Communications Inc. and NXP Semiconductors, and steel producers and metals companies like Alcoa Corp. and United States Steel Corp. are among the hardest hit in NY trading, while the Dow Jones Transportation Average is down 1.9 per cent, the most since May 3.

The Hong Kong Hang Seng index lost 2.8 percent as Shanghai Composite dropped 3.78 percent.

Led by President Donald Trump, U.S. officials have started a trade war with China in an effort to wring concessions from the country, which has surged economically over the past two decades due to affordable labor and lax intellectual property protections.

"We don't want a trade war, but we're not afraid of a trade war, " ministry spokesman Geng Shuang said.

"We have to", Trump told reporters Friday. But the lopsided status of U.S.

The intellectual property sanctions were the latest in a spate of protectionist measures unveiled by Trump in recent months that included tariffs on steel and aluminum imports to the USA and a tough rhetoric on trade negotiations from North America to Asia. China is retaliating by raising import duties on $34 billion worth of American goods, including soybeans, electric cars and whiskey.

Chinese regulators also have the option of broadening their retaliation by tying up American companies in tax or anti-monopoly investigations or by denying or revoking licenses. Which is to say: Beijing is using violations of worldwide trade rules in a bid to reshape the global economy in a manner that will weaken the West relative to China.

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China's benchmark equity gauge tumbled to a two-year low in Tuesday and the yuan weakened as a trade dispute with the USA intensified.

Economists warn Washington might be undercutting its negotiating position by alienating potential allies.

The latest round of tariffs would nearly definitely put the USA into all-out trade war against China.

Europe's main equity benchmarks sank 1 to 1.5 per cent in early trading and Wall Street futures were pointing to similar falls there later, while safe-haven government bonds and the Japanese yen rallied as investors sought protection.

The dollar rose against a basket of currencies as traders bet on a escalating trade war forcing inflation up in the United States because of costlier imports, raising the prospect of more interest rate rises. "However, confronted by such short-sighted act that hurts both United States itself and others, China has no choice but to fight back forcefully".

The White House has not set a date for the imposition of any new tariffs beyond the initial list.

The U.S. imports about $505 billion a year in goods from China.

Lower-risk assets gained on the latest round of trade threats.

"I do think this is an unusual way to negotiate, upping the pressure and putting on display what kind of damage you are willing to inflict and live with so that the stakes get raised before you sit down at the table", he said.

Shanghai and Hong Kong stocks plunge today on investors' fears that the United States and China could be heading for a full-blown trade war following tit-for-tat tariff threats.