China 'underestimated' Trump, a key adviser says

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"If the USA 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.

Trump said on Monday he had asked the US Trade Representative to target $200 billion worth of imports for a 10 percent levy, citing China's "unacceptable" move to raise its own tariffs.

The ministry also expressed its disappointment that the new tariffs do not reflect the "consensus" the two countries had come to during recent trade negotiations, after which China declared the trade war was over.

A paper published by Canadian think tank the CD Howe Institute suggests that Mr Trump's threats are having an effect on United States manufacturing by using "uncertainty as a new weapon in trade protection". China, meanwhile, has responded to the White House with reciprocal measures aimed at usa industries that affect Republican-voting states, Trump's primary base of support.

April 5: Trump threatens to hit China with an additional $US100 billion worth of Chinese imports with tariffs. He said he would pursue additional tariffs on another $200 billion worth of goods, for a grand total of $450 billion.

Pompeo said he raised the issue last week in a meeting with Chinese President Xi Jinping, saying, "I reminded him that's not fair competition".

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Derek Scissors, a China scholar at the American Enterprise Institute, a Washington think tank, spelled out the reality of the situation when he said that Beijing has almost exhausted U.S. imports to target.

Apple's iPhones are assembled in China from parts manufactured in China, the US, and other countries, a process that could bring the tech giant into the forefront of the Trump administration's escalating trade actions against Beijing as well as China's retaliatory measures. -China trade spat escalated and base metal prices slid.

"This would be hugely costly to U.S. corporations, especially if they began to export items, like prescription drugs, to the rest of the world", Baker says.

The initial USA tariffs are aimed at items such as semiconductors, electronics, plastics and other goods from sectors expected to benefit from China's "Made in 2025" initiative to dominate the world in technology areas such as robotics, driverless cars and advanced medical devices. The world's third largest smartphone manufacturer, Huawei has longed for its phones to be featured on the shelves of major US carriers.

"That understanding, however, could leave it vulnerable to an outsized loss if the resilience many participants expect it to show again in the face of negative-sounding trade headlines doesn't persist".

Washington's dispute with China is part of broader US complaints about global trading conditions that have prompted Trump to raise duties on steel, aluminum, washing machines or solar panels from Canada, Europe, Japan and South Korea.

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After Trump's leniency prompted a backlash and left the fate of ZTE hanging in the balance, Chinese trade negotiators frustrated their American counterparts seeking to finalize an agreement and win more concessions.

Stephen Innes, head of Asia-Pacific trading at Oanda, said Trump's latest move goes "beyond "tit-for-tat" levels and, predictably, investors are running for cover under the haven umbrellas as global equity indices are crumbling under the weight of an escalating trade war".

The news sent global stock markets skidding and weakened both the dollar and the Chinese yuan in Asian trade on Tuesday.

The intellectual property sanctions were the latest in a spate of protectionist measures unveiled by Trump in recent months that included tariffs on steel and aluminum imports to the United States and a tough rhetoric on trade negotiations from North America to Asia.

"History shows that there are various other measures [China] could take to inflict pain on U.S. companies. including scaled up health, safety and tax checks, delaying the imports of goods, and boycotts", warned Louis Kuijs, the head of Asia economics at Oxford Economics. "What the president did yesterday makes it clear that they have much more to lose in this dispute than the U.S".

In a statement, Mr Trump said he had asked the USA trade representative to identify the Chinese products to be subject to the new tariffs.

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Officials also drew up a second list of $16 billion in chemical and energy products to hit with new tariffs, though China did not announce a date for imposing them.