Trump expects 'great deal' with China, but more tariffs if not

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World markets are mixed after U.S. President Donald Trump said he might impose more tariffs on Chinese goods, though he said he was ready to strike a "great deal" with Beijing over trade.

According to the Bloomberg report, the new list would cover the $257 billion worth of Chinese goods not already affected by tariffs and would come into effect by February, following a 60-day public comment period.

Trump also threatened on numerous occasions to put punitive tariffs on the entirety of Chinese imports to the USA if Beijing enacted retaliatory measures in response to Washington's latest round of duties on US$200 billion of Chinese goods. The sources stressed however that the new tariffs have not yet been finalised. Previous rounds of USA tariffs have taken at least two months to impose once a list of products was announced, allowing for public comments to be aired.

The report sent a market that was rising after promising tech news back down, causing the Dow and S&P 500 to give up their gains for the year.

Hong Kong's Hang Seng Index fell 0.9 percent Tuesday, while the Shanghai Composite Index rose 1 percent. The rally helped turn both the S&P 500 and the Dow Jones Industrial Average once again positive for the year, though each is up less than 1 percent since the beginning of January. The issue is often put in terms of the "loss of face" by the Chinese leadership if it backs down-a position advanced by historian Niall Ferguson in an interview on the business channel CNBC yesterday as he pointed to the intractable character of the US-China trade conflict.

ANALYST'S TAKE: With new restrictions on a Chinese semiconductor maker, the "U.S. has escalated its trade war with China in an unexpected way", Chang Wei Liang of Mizuho Bank said in a commentary.

"Levies on such a wide range of goods would deal a tangible blow to China's growth", said Tom Orlik and Chang Shu.

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Oil has been caught in the global financial market slump this month, with equities under pressure from the trade conflict between the world's two largest economies.

The pan-European STOXX 600 index lost 0.14 per cent.

Amazon.com dropped another 6.3 percent to $1,538.88. The euro fell to $1.1354 from $1.1372.

Benchmark 10-year U.S. Treasury notes last fell 7/32 in price to yield 3.1132 percent, from 3.087 percent late on Monday.

USA crude fell 1.28 percent to $66.18 per barrel and Brent was last at $76.07, down 1.64 percent. Brent crude, used to price worldwide oils, lost $1.14 to $76.20 per barrel.

The dollar rose to 112.35 yen from 111.85 yen.

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