Trump accused of 'putting gun to EU's head' as trade fears mount

United States stocks were set to come under pressure again with investors unnerved by the prospect of a global trade war, as China fired its first retaliatory salvo against tariffs of up to $60bn announced by President Donald Trump's administration, Dow Jones Newswires reported.

Additionally, officials in China detailed a plan to retaliate to Trump's aluminum and steel tariffs by imposing about $3 billion worth of imports of United States goods.

Shen said China knows that it has benefited "in unfair ways" from trade between the two nations and is prepared to open its markets further.

China has not responded to the tariffs President Donald Trump announced Thursday, and stocks have flipped between gains and losses as investors try to figure out what might happen next and how it will affect the global economy and company profits. That was in addition to the metals duties ordered earlier this month on China and other countries.

A second day of big losses pushed USA stocks to their worst week in two years. The move is created to cut the U.S. trade deficit and prevent alleged misappropriation of USA intellectual property. If your glass is half-full, China's measured response opens the door to negotiations.

China urged the United States to "pull back from the brink", while its embassy in Washington vowed Beijing would "fight to the end" in any trade war.

Big U.S. companies tend to get more of their revenue from foreign customers than small companies do, and that makes them more vulnerable to damage from a trade war. Helfenbein suspected that textile is likely to be included in the list. The USTR will announce the proposed list in the next "several days", according to the fact sheet. "Strap in as a tit-for-tat tariff tiff is about to start", Stephen Innes, head of Asian trading at OANDA, said in a commentary.

"A trade war is good for bonds", said a fixed-income portfolio manager in Shanghai, adding that he expects the 10-year yield to fall toward 3.5 percent in the near term. With almost 1.4 billion people, China is a big market for the largest US businesses.

But speaking to reporters on Friday as he signed new budget legislation, Trump said his efforts were beginning to bear fruit.

"We've been told for our entire careers that trade wars made the Great Depression worse".

More than 400 mainland China stocks plunged by the maximum allowed 10 percent, led by tech and materials firms targeted or seen as being most affected by the US tariffs.

Even central banks, which normally stay above the fray of trade spats, are weighing in. The Bank of England warned Thursday that increased protectionism could have a "significant negative impact" on global growth.

Having spent his first year in office basking in the luxuriant glow of the Dow Jones, it should be odd that Donald Trump would so carelessly disregard the market indicators flashing red over his latest flirtations with protectionism.

"That the willing to risk these disruptions indicates how serious the U.S. Administration finds China's forced technology transfer, cyber theft, and discriminatory industrial policies", AmCham China Chairman William Zarit said in a statement.

"The administration is moving forcefully into the anti-trade portion of its policy agenda", Barclays economist Michael Gapen wrote in a report on Friday.

"We are fully prepared to firmly defend our interests", he said. However, they concede they're anxious about retaliation. China imports almost $14.2 billion worth of soybeans every year.

  • David Armstrong