Beijing says it would fight back against new Trump proposals for an additional $100bn in tariffs
The war of words between the Trump administration and China over trade has escalated after Beijing threatened to fight back “at any cost” against new US proposals for an additional $100bn (£71bn) in tariffs.
Chinese officials said they would “definitely fight back firmly” should the US persist in using “protectionism”, in a warning issued hours after President Trump unexpectedly suggested imposing extra trade tariffs on goods shipped from China to the US – on top of the $50bn worth of tariffs announced last month .
Wall Street slumped again following a week of rising tensions between the two countries that has rattled financial markets and raised the prospect of disruption to world trade. The Dow Jones Industrial Average was down by more than 400 points by lunchtime in New York, as investors reacted to renewed hostilities and disappointing US jobs figures.
Trump also hit out at the World Trade Organisation as he responded to China opening a challenge against the tariff plans at the WTO. Trump tweeted that China gets “tremendous perks and advantages” at the World Trade Organisation because it is considered a developing nation. “Does anybody think this is fair. We were badly represented. The WTO is unfair to US,” he said.
Although hope remains for averting a full-blown trade war, analysts at Oxford Economics said failure to avoid a clash would trigger a “pronounced” slowdown for the world economy by knocking 0.5% off worldwide growth. The British consultancy said under that scenario GDP would increase by about 2.5% next year instead of the previously forecast rate of 3%. That would equate to as much as $617bn being lost from world economic growth.
