Wall Street shares sank after China defied Washington by announcing retaliatory tariffs, the latest salvo in the two countries' increasingly belligerent trade dispute, sending investors fleeing equities for less risky assets.
China on Monday said it will impose tariffs on $60 billion worth of U.S. goods from June 1, after Washington announced plans to tax nearly all Chinese imports to the United States.
While the current set of tariffs do not affect Apple products like iPads or iPhones, US President Trump has also threatened a further 25pc tariff on "additional goods sent to us by China".
The president started raising tariffs last July over complaints China steals or pressures foreign companies to hand over technology and unfairly subsidizes Chinese businesses that are striving to become global leaders in robotics and other technology.
It said Beijing was open to talks but would not yield on important issues of principle.
This latest round of tariffs will add another $500 a year in costs for the average American household, says Katheryn Russ, an economics professor at the University of California at Davis. By doing so, China was dreaming, he said. "Given that Trump now appears to have a unified administration while China stalls, we don't expect any quick resolution".
The United States accuses China of resorting to predatory tactics in a drive to give Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles.
The Trump administration has imposed tariffs on Chinese goods before, and in each case, China was quick to impose tariffs on US products.
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"We're going to take the highest year, the biggest purchase that China has ever made with our farmers, which is about $15 billion, and do something reciprocal to our farmers so our farmers can do well", Trump told reporters at the White House.
But Liu downplayed the level of tensions, saying China could cope with the challenges posed by the trade dispute. "The U.S. -instigated trade war against China is just a hurdle in China's development process". "We now have an excuse to have a correction". ". This is a risk we should and can take without damaging our economy in any appreciable way".
Trump might meet his Chinese counterpart, Xi Jinping, during next month's meeting of the Group of 20 major economies in Osaka, said Kudlow, his economic adviser, Larry Kudlow.
Friday night on the radio, LevinTV host Mark Levin explained why it's good that the Trump administration is taking such a hard-line stance against China in recent trade talks.
And the trade dispute has hit US soybean exports hard. "And until we do we have to keep our tariffs on", Kudlow said.
"China's adjustment on additional tariffs is a response to USA unilateralism and protectionism", its finance ministry said.
"It's not China that pays tariffs", Wallace challenged Kudlow.
The president has repeatedly insisted that increased tariffs on Chinese goods don't hurt American consumers. Discussing the likelihood of China hitting back at US imports over the weekend, Larry Kudlow, Trump's top economic adviser, said: "I reckon they will".