China said it will impose higher tariffs on $60 billion worth of American-made products on June 1 as payback for President Trump's decision last week to jack up US tariffs on Chinese goods to punish Beijing after trade talks fell apart heading into the weekend.
Trump said Monday he would meet Xi during the Group of 20 meeting of major economies six weeks from now on June 28 and 29 in Osaka, Japan. "With the re-escalation of tariff war risks (and China vowed to retaliate), it is challenging to reach an agreement very soon". Trump tweeted on Tuesday morning that the US will make a deal with China "when the time is right".
US officials over the weekend sought promises of concrete changes to Chinese law and Beijing said it would not swallow any "bitter fruit" that harmed its interests.
The Dow Jones Industrial Average once lost as much as 719.86 points or 2.77 percent in the session, marking the deepest fall since January 3.
After earlier falling against the yen, the dollar strengthened 0.25% against the Japanese currency to 109.57. The two sides have made progress and held a number of "constructive conversations" on structural issues and trade imbalances.
Optimism that the United States was close to a trade deal with China had been one of the pillars of this year's stock market rally.
USA agricultural products have been targeted by China's retaliatory tariffs, and American farmers, a key political constituency for Trump, are increasingly frustrated with the failure of the two sides to find a solution to the dispute.
On May 10, U.S. "You can also buy from a non-Tariffed country instead of China", he continued.
"It's not China that pays tariffs", host Chris Wallace said. He did not provide details on the plan, which follows $12 billion in similar farm aid a year ago.
Beijing is running out of USA imports to penalize due to their lopsided trade balance. Consumer spending accounts for two-thirds of US economic activity.
In a barrage of tweets posted late morning BST on Tuesday, Trump said that "in one-year tariffs have rebuilt our steel industry - it is booming!"
As negotiations toward resolving the U.S.
This past week's sell-off began after President Trump tweeted that he would be raising tariffs from 10% to 25% on $200 billion worth of Chinese imports. Earlier, European shares dropped more than 1 per cent after the European Union said it was finalising a list of U.S. goods to target in the event Mr Trump imposes levies on vehicle imports. The USTR noted it excludes pharmaceuticals and rare earths minerals used in electronics and batteries.
At the same time, China is vowing not to succumb to such pressure. Too expensive to buy in China.
FILE PHOTO: U.S. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping at the Great Hall of the People in Beijing, China, November 9, 2017.
"I think this is a prelude of things to come", said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. A spokesman for the company said Boeing was "confident the United States and China will continue trade discussions and come to an agreement that benefits both USA and Chinese manufacturers and consumers".
"However, I think traders might underestimate the consequences if there is no deal and furthermore, tough trade negotiations between the USA and the European Union are still to follow later this year, which could spell new turmoil for stocks".