Trump threatens more tariffs against China

President Donald Trump has directed the U.S. Trade Representative to prepare new tariffs on $200 billion in Chinese imports as the two nations move closer to a trade war.

In response, China has threatened what it called “comprehensive measures,” raising the risk that it would target major American companies operating in China.

Trump’s proposed new tariffs would amount to the latest round of punitive steps in an escalating rift between the world’s two largest economies.

The two nations are edging toward a trade fight that analysts say would undermine both their economies and likely slow global growth.

The White House has accused China of forcing U.S. companies to share advanced technology with Chinese partners as a condition of doing business there. The administration also revived its complaints Tuesday about America’s gaping trade deficit with China, which it says reflects an unfair trading relationship.

Trump previously ordered 25 per cent tariffs on $50 billion in Chinese goods in retaliation for Beijing’s forced transfer of U.S. technology and for intellectual property theft. Those tariffs were matched by China’s threat to penalize on U.S. exports, a move that drew the president’s ire.

On Monday night, Trump told the U.S. trade representative, Robert Lighthizer, to target an Specialist Michael Pistillo, left, and trader Thomas Ferrigno work on the floor of the New York Stock Exchange on Tuesday. U.S. stock markets opened sharply lower Tuesday as tensions over trade between the U.S. and China seem closer to a boil.

additional $200 billion in Chinese goods for 10 per cent tariffs. These penalties would go into effect, the president said, “if China refuses to change its practices” and proceeds with its plans for retaliatory tariffs.

The tit-for-tat tariffs could then escalate further yet: Trump threatened tariffs on $200 billion more in Chinese products if Beijing lashes back again.

Combined, the potential tariffs on Beijing could reach $450 billion – an amount equal to 89 per cent of Chinese goods imported to the United States last year.

Neither side has yet imposed

tariffs on the other in their growing dispute over technology and the U.S. trade gap; the first round is to take effect on July 6. But the rhetoric is intensifying, with Trump lashing out at Beijing over its threat to retaliate against the administration’s latest proposed tariffs.

The president asserted in a statement Monday night that China is determined “to keep the United States at a permanent and unfair disadvantage.”

“China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual

property and technology,” Trump said in the statement. “Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong.”

U.S. stock markets fell sharply Tuesday, with investors increasingly nervous about the impact of the escalating fight. The Dow Jones industrial average was down about 320 points, or 1.3 per cent. Shares of large U.S. companies with significant overseas business were hit especially hard. Boeing’s stock shed 3.6 per cent, Caterpillar 3.7 per cent and GE 1.7 per cent.