US stocks open lower on escalating US-China trade dispute

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"Even shooting wars end with negotiations", Ross said.

That's on top of import charges announced Monday on 128 items including fruit, nuts, pork, ginseng, wine, steel pipe and aluminum scrap in retaliation for an estimated US$3 billion in USA tariffs on steel and aluminum.

Canadian producers can't automatically replace American products, but if the material is the same, multinational companies might try to relocate their production destined for China to escape USA duties, Podruzny added. But China's top supplier is Brazil, which could pick up more of the marketshare if American soy goes under the new tariff.

A small-but-growing number of Chinese-assembled cars making their way to the USA auto market could be under threat as the Trump administration looks to slap a 25% duty on about $50 billion worth of imported goods.

The US has dominated the global economy for much of the last century, but this fight comes as China - with its population of 1.4-billion - is starting to challenge US hegemony.

The threat of an all-out trade war has been particularly felt in the US' rural regions, and any move by the Chinese government to further raise tariffs on American soybeans could prove devastating for United States farmers in the Midwest.

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In another warning move, Chinese regulators launched an anti-dumping investigation of US sorghum last month as rhetoric between Beijing and Washington heated up. But Beijing wants to capture more of the profits by becoming a creator of technology instead of a low-priced factory.

Trump said he was still open to talks, but only if they were aimed at achieving "free, fair, and reciprocal trade". The duties would mostly steer clear of the billions of dollars of consumer goods that the USA imports from China, such as iPhones, toys, and shoes.

In a first round move, China on Monday had imposed fresh levies on 128 US items, worth $3 billion, setting the tone for retaliatory cycle of tariffs. Farm states generally backed Trump in the 2016 election and their exports could be hurt.

Both sides have calibrated their current actions around the figure of $50 billion worth of imports.

"In other words, this looks like a shot across the bow with regard to Boeing and our base case remains that we will see little change in Boeing aircraft deliveries into China", he wrote in a report.

The trade war triggered further heavy selling in global stock markets and commodities, with US stock futures sliding 1.5 per cent, soybean futures plunging 3.7 per cent and the dollar and China's yuan both hit.

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"If the U.S. is using the sanctions stick, then they've got the wrong idea", Wang Yi said.

A USTR spokeswoman said that the $100 billion second-round of potential tariffs had not been determined yet and would be selected by USTR career staff-not political appointees-along with economists and trade experts. The agency said it chose products to minimize the impact on the US economy and consumers.

They were announced after the Trump administration unveiled a list of 1,300 Chinese products to be targeted by tariffs including from the aerospace, information and communication technology, robotics, and machinery industries.

A trade war between the United States and China could rock the global economy or markets analysts have warned, with some claiming "American families will be on the losing end".

The release of the list by U.S. Trade Representative Robert Lighthizer leads into a roughly 60-day period when the public can provide feedback and the government holds hearings on the tariffs.

Foreign companies are increasingly alarmed by initiatives such as Beijing's long-range industry development plan, dubbed "Made in China 2025", which calls for creating global leaders in electric cars, robots and other fields.

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Brazil supplied about half of the almost 100 million tonnes of soybean imported by China a year ago.