U.S. President Donald Trump ratcheted up the trade war rhetoric with Beijing on Thursday, saying he had instructed the U.S. trade representative to consider tariffs on an additional $100 billion worth of Chinese goods.
The move came a day after China issued a list of U.S. goods, including soybeans and small aircraft, worth $50 billion for possible tariff hikes. Beijing’s response came after the U.S. proposed tariffs on $50 billion worth of Chinese goods earlier this week.
U.S. stock futures dropped on Trump’s latest trade directive. Dow futures fell and were down about 400 points in after-hours trading.
Financial markets have swung wildly over the past few days in response to fears of escalating trade tensions between Washington and Beijing.
“Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,” Trump said.
Since the start of this week, the United States and China have been engaging in a tit-for-tat trade spat. On Monday, in response to earlier tariffs on steel and aluminum imposed by the Trump administration, China started tariffs of up to 25 percent on 128 U.S. products, including fruits, nuts, pork, wine, steel and aluminum.
Later on the same day, the USTR proposed to increase tariffs on 1,300 imported goods from China, mostly aerospace, medical and information technology products.
Less than 12 hours later, China said it would impose retaliatory duties of 25 percent on 106 politically sensitive American goods, including soybeans, automobiles and aircraft.
The proposed U.S. list is now entering a “public notice and comment process, including a hearing,” the USTR said. After this process is completed, the USTR will issue a final determination on the products subject to the additional duties.
China’s commerce ministry said the question of when the measures would go into effect would depend on when the U.S. tariffs became active.
China’s ambassador to the United States, Cui Tiankai, told reporters on Wednesday, “Negotiation would still be our preference, but it takes two to tango. We will see what the U.S. will do.”
A senior U.S. official told Reuters late Thursday that the United States was willing to negotiate with China on trade, but only if talks were serious, as previous attempts produced little progress.
No formal negotiating sessions have been set, but there have been “ongoing communications with the Chinese on trade,” said the official, who requested anonymity to discuss the Trump administration’s trade strategy.
Some information for this report came from Reuters.
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