Markets Right Now: China tariff worries sink U.S. stocks

Chinese President Xi Jinping

The Trump administration is planning to announce tariffs on Chinese products Thursday as well as restrictions on Chinese investments.

On Friday, China's commerce ministry said it opposed the USA action against Chinese imports.

China imported 618,287 tonnes of scrap aluminium from the United States, its top supplier, in 2017.

Asked about the remarks, Chinese foreign ministry spokeswoman Hua Chunying told a press briefing on Monday that "it would have been more appropriate to say that it's time to stop the US's economic intimidation and hegemony".

He also alleged that China had been indulging in tremendous intellectual property theft worth hundreds of billions of dollars on a yearly basis.

"The President signs a Presidential Memorandum targeting China's economic aggression", the release said on Wednesday.

Business leaders acknowledge that China's treatment of intellectual property is a problem, but they warn that tariffs could backfire.

Never before has an official as senior as Cui hinted about cutting back Treasury purchases, indicating how serious China is about responding to the sanctions introduced by the administration of President Donald Trump.

In a second step, a 25 percent tariff would be imposed on eight goods totaling almost $2 billion, including pork and aluminum scrap, after "further evaluating the impact of the USA measures on China", the statement said. Fund liquidation took markets sharply lower at the start of the week, and prices stayed under pressure into Friday.

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Lighthizer acknowledged those concerns during testimony this week before the House Ways and Means Committee. Let's make trade, not war.

Stocks plunged, sending the Dow Jones industrials down more than 700 points, as investors feared that trade tensions will spike between the USA and China.

Chinese purchases of those goods previous year totaled $3 billion, the ministry said. "So we have to do something".

The president sees the record $375 billion deficit in goods trade with China as evidence that USA businesses are being unfairly treated. When Trump talks about the trade gap, he often excludes services, where the USA has a surplus. The U.S. looks set to join the group of countries embroiled in disputes at the World Trade Organization involving curbs imposed on national security grounds. A more complete list is due soon, to be followed by a 30-day comment period.

Washington this week said it would temporarily exempt Europe as well as countries including Brazil, Argentina, South Korea and Australia from the steep new steel and aluminum tariffs that Trump unveiled this month and which took effect Friday.

White House officials said the actions came after years of efforts failed to convince China to change its behavior.

Among Trump's first actions as president, however, was to pull out of the deal.

While the two sides have traded barbs in public, U.S. and Chinese officials have begun behind-the-scenes negotiations to improve American access to the Asian country's huge market, according to the Wall Street Journal.

"Until the Trump administration articulates those concerns and how China can address them, it's going to be very, very hard for China to make those changes", said Parker.

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