China promises retaliation if US imposes more tariffs

Roman Schwartz
September 10, 2018

Since then, though, Trump has threatened an additional $267 billion of tariffs on China, a move revealed Friday that could cover virtually all Chinese-made goods entering the United States.

China has either imposed or proposed tariffs on $110 billion of United States goods, representing most of its American imports, though crude oil and large aircraft are still not targeted for penalties. But disagreements between the two major economic powers run deeper than just the trade balance and tensions remain over limits on US firms' access to Chinese markets, intellectual property protection, technology transfers, and investment. Hong Kong's Hang Seng index slipped 0.8 percent.

Ford didn't move production of the Focus to China by accident; it did so because the USA market has shifted away from smaller vehicles toward SUVs, which has made production of the Focus in the US -a relatively expensive location-an illogical choice.

"The overall sense is that the United States will continue to escalate the pressure until China submits to USA demands which does not seem likely any time soon", JPMorgan said in a note.

The strong employment report boosted the dollar, which held on to Friday's gains at 95.43.

China has threatened retaliation, which could include action against United States companies operating there.

Apple has indicated that President Donald Trump's proposed decision to impose 25 per cent more tariffs on products from China could result in prices of some devices from the company going up.

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The auto-sector market economist Jon Gabrielsen told the Detroit Free Press that Trump's tweet was "further evidence that neither the president nor his trade representatives have any clue of the complexities of global supply chains".

Chinese shares were battered with the blue-chip index off 1.4 percent.

"Markets had some hope that as we got to that deadline there would be some concessions, but there's really escalation", Sean Fenton, director at Tribeca Investment Partners, told Bloomberg Television.

In early European trade London, Paris and Frankfurt all fell 0.1 percent.

The Australian dollar, a proxy for emerging market growth, hovered near its lowest in 2-1/2 years.

"People have concerns about the stock market". USA crude futures were up 44 cents at $68.20 per barrel and Brent crude futures added 52 cents to $77.35 a barrel.

Spot gold was a tad softer at $1,193.01.

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