Stocks skid as trade war worsens with new tariff threats

Trump Announces New Taxes on TVs and Air Conditioners

Trump Announces New Taxes on TVs and Air Conditioners

Countermeasures involve imposing high tariffs on United States exports to China which Beijing has imposed on a range of goods. The latest move, which involves levying 10% duty on a new selection of Chinese goods, follows an earlier decision when he slapped 25% duty on another set of Chinese exports worth $38 billion.

"This is a fight between unilateralism and multilateralism, protectionism and free trade, might and rules", foreign ministry spokeswoman Chunying Hua told a regular briefing on Wednesday. "The Chinese government as always will have no choice but to take the necessary countermeasures", it said.

The Dow Jones Industrial Average fell 219.21 points, or 0.88 percent, to 24,700.45, the S&P 500 lost 19.82 points, or 0.71 percent, to 2,774.02 and the Nasdaq Composite dropped 42.59 points, or 0.55 percent, to 7,716.61.

The list is subject to a two-month public comment period before taking effect.

It seems that the USA is escalating the scale of this trade friction.

In fact, the trade war launched by the USA has already caused concerns by the worldwide community.

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President Donald Trump vowed to hit back on a growing list of products after China retaliated in kind for the first round of 25 per cent tariffs on $34 billion worth of imports that Washington imposed last week.

USA officials released a list of thousands of Chinese imports the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminium.

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Hong Kong's main index shed 1.3 percent.

The dollar rose sharply against the Japanese currency, increasing to 112.04 yen from 111.28 yen.

Also Tuesday, China stepped up action against some USA goods by announcing anti-dumping duties raw materials used in making optical fibers. They are trying to make up for the loss of US and European sales following higher tariffs imposed over complaints they sell at improperly low prices.

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Senate Finance Committee Chairman Orrin Hatch said the announcement "appears reckless and is not a targeted approach".

"Given the magnitude and breadth of the tariff list, the impact is expected to ripple through supply chains and cause collateral damage on regional economies", Zhu Huani of Mizuho Bank said in a commentary. Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators.

The overall blow from Friday's tariff hikes to the world's second-largest economy should be limited, according to private sector analysts.

"Resolving these challenges in an equitable manner is essential for the United States and China to have a healthy long-term commercial relationship that brings benefits to both our peoples", it said in a statement on the survey results.

In its policy agenda released in January, the United States trade office said the WTO needed to change its "self-declare" policy for developing nations to stop major economies like China and India from getting the preferential treatment that should be reserved for the world's poorest nations.

Stephen Holmes, a spokesman for the Home Depot, said some of the products on the list - like lumber and carpet - won't affect his company because it receives most of those from the USA and Canada.

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