China hits back at USA with tariffs on $60bn of products

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Mr. Trump has publicly called for the central bank to do just that, but with unemployment at a half-century low, the economic case for adding yet another dollop of stimulus is limited. There will be nobody left in China to do business with'. Chipmakers were among the biggest decliners.

European stocks also took a dive, adding to their earlier losses. Farming equipment maker Deere drove losses in the industrial sector.

There is every intention on the part of Beijing to reach a conclusion to a trade war that China and the U.S. Chamber of Commerce each opposed from the beginning.

Those hopes are now being dashed and replaced by concerns that the trade war could crimp what is otherwise a mostly healthy economy.

Trump said in another Twitter post that the trade war would not have a significant impact on USA trade. 'This has been proven recently when only 4 points were paid by the US, 21 points by China because China subsidizes product to such a large degree'.

The Dow Jones Industrial Average dove 612 points, or 2.4 per cent, to 25,332 as of 12.15pm Eastern Time (4.14am NZT). Earlier, it was down 719 points.

"China should not retaliate - will only get worse!"

The S&P 500 Index dropped the most in four months and the Nasdaq Composite saw its biggest decline of the year.

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Earlier, China announced it would impose higher tariffs on a range of U.S. goods including frozen vegetables and liquefied natural gas, a move that followed Washington's decision last week to hike its own levies on US$200 billion (S$274 billion) in Chinese imports.

The June gold contract was up US$11.00 at US$1,298.40 an ounce and the July copper contract was down 6.05 cents at US$2.71 a pound.

In addition to raising tariffs on Friday, President Trump is now threatening to impose a 25 percent tariff on the rest of the goods China exports to the United States. The price of soybeans slid 0.8% to $8.04 a bushel. It remains China's intention to agree to a win-win trade deal as soon as possible.

That could all change if a U.S.

Officials appeared to be studying the potential impact on China's economy before picking their next steps, said Jake Parker, vice-president of the U.S. Chipmakers Microchip Technology dropped 6.3% and Advanced Micro Devices lost 6.2%.

"China will never surrender to external pressure", foreign ministry spokesman Geng Shuang said at a regular briefing on Monday. It also makes banks' lending less profitable. Micron Technology Inc, Intel Corp and Qualcomm Inc fell between 2.6 per cent and 3.3 per cent.

Safe-play holdings were the only winners as traders sought to reduce their exposure to risk. That's 70 per cent of the US economy. Ten-year Treasury yields hovered near the lowest level since late March.

In another sign of how nervous investors were feeling, an index known as Wall Street's "fear gauge", which measures how much volatility the market expects in the future, spiked 28.1%. "Though we are glad that the administration is considering additional assistance, such temporary solutions are not sufficient to address the permanent damage the trade war has inflicted on agricultural export markets". But that decision is up to the Federal Reserve, and its policy makers are likely to stand pat after a first quarter in which gross domestic product surged ahead at a 3.2-per-cent annualized clip, the best start to a year since 2015.

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