China's government has criticized the latest US threat of a tariff hike as "totally unacceptable" and vowed to retaliate in their escalating trade war. It said, "the Chinese government will be forced to impose necessary countermeasures" to protect its "core interests".
Pointing to a moderately higher open for Wall Street shares later in the day, S&P 500 futures and Dow futures were both up by 0.3 percent.
The list of new tariff targets from the US Trade Representative includes vacuum cleaners, furniture, and auto and bicycle parts, but US-branded smartphones and laptops were excluded.
- "Unfair practices" - The trade confrontation between Washington and Beijing has been escalating for months, despite Trump's repeated statements that he has a good relationship with China's President Xi Jinping.
The comments came after President Donald Trump's administration threatened fresh tariffs on another $200 billion in Chinese goods and Beijing vowed to retaliate, the latest salvo in the escalating tariff battle.
The US trade deficit in goods with China ballooned to a record $375.2 billion previous year, stoking his anger over trade policies. In a statement, it called the US actions "completely unacceptable".
The initial USA tariff list focused on Chinese industrial products in an attempt to limit the impact on American consumers.
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The onshore yuan tracked its offshore counterpart lower with traders closely watching the key 6.7 per dollar level as pressure mounted on the currency.
Senate Finance Committee Chairman Orrin Hatch said the announcement "appears reckless and is not a targeted approach".
ANALYST'S TAKE: "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.
China accused the United States of starting "the largest trade war in economic history", after the first round of tariffs took effect last week. "It will also result in retaliatory tariffs, further hurting American workers", a Chamber spokeswoman said, according to Reuters.
"The U.S.is not only opening fire to the whole world, but also firing at itself", Hua said.
In its policy agenda released in January, the USA 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.
As its dispute with Washington deepened, Beijing has been calling on other countries to support global free trade and has talked up efforts to ease investment rules.
"It won't be hard for Chinese companies to find replacements for USA goods", said Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, quoted by the newspaper Global Times.
On Monday, Chinese and German companies including BASF and Volkswagen signed business deals worth 20 billion euros ($23.6 billion) during a visit to Berlin by China's No. 2 leader, Premier Li Keqiang.