Miffed by Pompeo's comments, China hit back saying that United States is making allegations to cover up its unilateral protectionist policies. "China has been taking out Dollars 500 billion a year out of our country and rebuilding China", Trump said yesterday in his address to the National Federation of Independent Businesses.
"If the US becomes irrational and issues this list, China will have no choice but to adopt strong countermeasures of the same amount and quality, " the ministry statement said.
China's commerce ministry immediately responded by saying the United States "practice of extreme pressure and blackmail departed from the consensus reached by both sides during multiple negotiations and has also greatly disappointed global society".
A paper published by Canadian think tank the CD Howe Institute suggests that Mr Trump's threats are having an effect on U.S. manufacturing by using "uncertainty as a new weapon in trade protection". It showed a willingness to do that to South Korean businesses a year ago during a period of tension between the two Asian countries. The Dow Jones industrial average turned negative for the year amid its longest losing streak since March 2017. Boeing's stock shed 3.6 per cent, Caterpillar 3.7 per cent and GE 1.7 per cent.
'Unacceptable' The China trade offensive is only one side of Trump's multi-front battle with the United States' economic partners as he presses ahead with his protectionist "America First" agenda.
Dr Zhou and her team had looked at the USA imposing tariffs on China without any retaliation, China imposing tariffs on United States goods, and an all-out trade war between the two.
This move from President Trump could be counted as a countermeasure to China's decision to raise tariffs about $50 Billion on U.S products.
On Monday, the Trump administration responded with an unprecedented threat to levy a 10 percent tariff on $200 billion in Chinese products - a move that would put a large share of the $505 billion in products that the United States imports from China under tariffs.
"This would be hugely costly to USA corporations, especially if they began to export items, like prescription drugs, to the rest of the world", Baker says. USA bond yields fell in a flight to safety.
"China could target US firms through tax and regulatory policies", said Citigroup in a report. They've taken so much.
Navarro also disputes any notion that the trade standoff would damage the broader relationship with China. Our view is that these actions are necessary to defend this country. -China trade spat escalated and base metal prices slid.
China's central bank unexpectedly injected 200 billion yuan ($31 billion) in medium-term funds into the banking system on Tuesday in a move that analysts said reflected concerns about liquidity but also the potential economic drag from a full-blown trade war.
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