Trump's tariff wars could wipe out a chunk of tax cut benefits

Trump and Jinping at meeting

"We are determined and capable of safeguarding our legitimate rights and interests", Foreign Ministry spokesperson Geng Shuang said.

Those hopes are now replaced by concerns that a full-blown trade war could crimp what is otherwise a mostly healthy economy.

"It's clear that there is a lot of nervousness around the U.S".

Trump, who has embraced protectionism as part of an "America First" agenda, added that he had not yet decided whether to go ahead with tariffs on roughly another $325bn in goods from China.

"China's adjustment on additional tariffs is a response to United States unilateralism and protectionism", its finance ministry said. -China Business Council, an industry group. Therefore, China should not retaliate-will only get worse!

Chinese Vice Premier Liu He talks with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin as they depart a round of trade talks in Washington on Friday.

"Many tariffed companies will be leaving China for Vietnam and other such countries in Asia". This is not something that China wants to see as China looks toward long term realities in which an ever more interconnected world will benefit from win-win prosperity that suits the needs and aspirations of both emerging markets and advanced economies. USA crude dropped 1% to settle at $61.04 per barrel. Economists say Chinese leaders probably reject that as a violation of Chinese sovereignty. The tit-for-tat rattled global equity markets. Utilities were the only sector to rise on the stock market, and prices for US government bonds, which are considered ultra-safe investments, rose sharply, sending yields lower.

"From June 1, tariffs on $60 billion worth of imported United States goods will be increased", the statement read.

Forecasters warned Friday's hikes could disrupt a Chinese recovery that appeared to be gaining traction. Earlier in the year they had expected earnings to severely contract.

The latest tensions "raise fresh doubts about this recovery path", said Morgan Stanley economists Robin Xing, Jenny Zheng and Zhipeng Cai in a report.

He downplayed concerns that the tariffs would lead to US job losses and hurt the GDP.

President Trump's trade policy with China carries potential risk and reward for the 2020 election, argues Fox News senior political analyst Brit Hume. That would push annual growth below six per cent, raising the risk of politically risky job losses.

For its part, China said on Monday it plans to set import tariffs ranging from five percent to 25 percent on 5,140 U.S. products on a revised $60b target list.

"Further trade talks can not remedy the sharply increased uncertainty over Chinese and regional growth", Mizuho Bank said in a report.

When Chinese companies pay tariffs to export products to the USA, their American customers typically absorb the expense in the form of higher prices.

"There is nothing to be afraid of", said the party newspaper People's Daily. "Farmers continue to bear the brunt of the trade wars". "It is no big deal". The Dow fell more than 475 points at the open.