The financial hit from duties on US$250-billion worth of Chinese imports, US$50-billion of aluminum and steel imports and US$40-billion of European automobile imports could cost USA businesses and consumers an estimated US$50-billion - erasing some of the impact of recent USA tax cuts and eroding economic growth forecasts.
"All we're doing here with the president's trade policy is trying to defend our technology when it may be threatened", Navarro said.
Last month, Mnuchin said a trade war with China was "on hold" after officials of the world's two largest economies held talks in Beijing that were focused on opening more sectors of China's economy and increasing purchases of American goods. CFIUS reviews-or the threat of reviews-have largely halted Chinese purchases of USA semiconductor companies.
The iShares PHLX Semiconductor ETF fell more than 3 percent at 11:30 ET. The comments, made at a press briefing with European Commission Vice President Jyrki Katainen, come as both sides prepare to face off against US President Donald Trump's tariff threats.More news: Australia out of World Cup as Carrillo and Guerrero strike for Peru
Liu said that China and the European Union want to avoid such practices "impacting the global economy", Efe news reported. Among big USA movers, Intel Corp. fell 3.4 per cent, Visa Inc. fell 3.2 per cent and Boeing Co. fell 2.2 per cent.
The report, citing eight sources familiar with the plan, said such a move would put "Washington's trade war with Beijing on a potentially irreversible course".
Meanwhile, later this week, the Treasury Department is due to unveil a proposal on investment and export restrictions.More news: With luck, Harry Kane joins England's great World Cup strikers
But White House adviser Peter Navarro in a confusing interview with CNBC said first that there was no plan to impose investment restrictions on China or other countries, that the U.S. was not singling out China, and then said Treasury would present a report on investment restrictions on China on Friday.
The administration could declare an economic emergency, or IEEPA, to justify the restrictions, according to the report.
On Wall Street, the Dow Jones Industrial Average .DJI fell 328.09 points, or 1.33 percent, to 24,252.8, the S&P 500 .SPX lost 37.81 points, or 1.37 percent, to 2,717.07, and the Nasdaq Composite .IXIC dropped 160.81 points, or 2.09 percent, to 7,532.01.
Airbus could stand to benefit if China's looming trade war with the United States prompts Beijing to favour the European aerospace giant over USA rival Boeing. Its central bank said on Sunday it would cut the amount of cash some banks must hold as reserves by 50 basis points to spur lending to smaller firms.More news: Pete Davidson has FINALLY confirmed that he's engaged to Ariana Grande