Asian stocks extend slide, yen up as Sino-US trade dispute escalates

Saudi Arabia’s energy minister may face his toughest test when OPEC members meet. Bloomberg’s Heesu Lee reports

Saudi Arabia’s energy minister may face his toughest test when OPEC members meet. Bloomberg’s Heesu Lee reports

The US President, Donald Trump, has apparently asked a US trade rep to source another raft of tariffs on China, seeking a 10% tariff on $200 billion of Chinese imports.

The move comes just three days after the president detailed an initial $50 billion in imports that would be taxed an additional 25 percent, which he said was punishment for the theft of intellectual property from US companies, as well as the trade gap between the two countries.

Last week, Trump announced 25 percent tariffs on $50 billion in Chinese imports, prompting Beijing to follow suit with matching duties on American imported goods.

It said, "If the US side becomes irrational and issues the list, China must adopt comprehensive measures of the same quantity and quality in order to take strong countermeasures".

The president's action doubled his April threat to respond to any Chinese retaliation for his trade action with $100 billion in additional tariffs.

If Beijing choses to continue its tit-for-tat tariff policy with the US, Washington will impose further tariffs on imports from China in addition to the $200 billion announced, the statement warned.

Then China followed suit, unveiling 25 per cent duties on US$50 billion in U.S. imports - matching the USA rates.




Trump is moving forward with the measures after months of sometimes fraught shuttle diplomacy in which Chinese offers to purchase more American goods failed to assuage his grievances over a widening trade imbalance and China's aggressive industrial development policies. "This is unacceptable. 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 with the United States". American farmers export about $14 billion worth of soybeans to China each year and have been voicing concerns about what a trade war could do to their livelihoods.

The initial USA tariffs are aimed at items such as semiconductors, electronics, plastics and other goods from sectors expected to benefit from China's "Made in 2025" initiative to dominate the world in technology areas such as robotics, driverless cars and advanced medical devices.

The ministry said in a statement on its website that China would take comprehensive measures to "fight back firmly".

The Canadian dollar weakened to a one-year low of C$ 1.3237 overnight, before paring some of its losses on Tuesday, as investors anxious about Canada's trade feud with the United States.

Mr. Trump's comments came hours after the top USA diplomat accused China of engaging in "predatory economics 101" and an "unprecedented level of larceny" of intellectual property. Trump also has slapped tariffs on steel and aluminium imports from Canada, Mexico and European allies. "We do our best to call out unfair economic behaviors as well".

US equipment manufacturers said Trump's action was "terrible news" that would effectively wipe out all of the gains the industry has seen from tax reform and regulatory relief.

Beijing also drew up a second list of $16 billion in chemical and energy products to hit with new tariffs, though it did not announce a date for imposing them.

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