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| US stock market slides as China retaliates to Trump tariffs | |
| (about 2 hours later) | |
| The opening salvos of a tariff spat between the US and China that some observers fear could escalate into a full-blown trade war sent jitters through Wall Street on Monday. | The opening salvos of a tariff spat between the US and China that some observers fear could escalate into a full-blown trade war sent jitters through Wall Street on Monday. |
| Stock markets fell after Beijing hit back against Donald Trump’s imposition of tariffs on Chinese steel and aluminium with a swath of retaliatory duties on 128 imported American products, including pork and apples. | Stock markets fell after Beijing hit back against Donald Trump’s imposition of tariffs on Chinese steel and aluminium with a swath of retaliatory duties on 128 imported American products, including pork and apples. |
| The Dow Jones tumbled by more than 730 points, or 3%, to 23,368 as a selloff swept the New York market. The wider S&P 500 index was also down 3% in afternoon trading, and the tech-focused Nasdaq shed 3.5%. | |
| Food exporters were among the worst hit, with meat producer Tyson Foods down 4.6% to $69.82 while Hormel - which makes Spam - and Pilgrim’s Pride took smaller losses. | |
| China announced on Sunday that it would implement retaliatory tariffs of up to 25% on $3bn in food imports from the US, raising uncertainty over the possibility of a trade war between the two countries. | China announced on Sunday that it would implement retaliatory tariffs of up to 25% on $3bn in food imports from the US, raising uncertainty over the possibility of a trade war between the two countries. |
| China’s ministry of commerce said it would be “suspending tariff concessions” on 128 US food products. Fresh and dried fruits, almonds, pistachios and wine would be subject to an additional 15% tariff. Eight other items, including frozen pork, would be subject to a 25% tariff. The tariffs would begin on Monday, the ministry said. | China’s ministry of commerce said it would be “suspending tariff concessions” on 128 US food products. Fresh and dried fruits, almonds, pistachios and wine would be subject to an additional 15% tariff. Eight other items, including frozen pork, would be subject to a 25% tariff. The tariffs would begin on Monday, the ministry said. |
| The tariffs were in line with a list of potential duties on US products released two weeks ago in response to Donald Trump’s tariffs on steel and aluminium. The US president has also promised to levy 25% on $60bn in annual imports from China. | The tariffs were in line with a list of potential duties on US products released two weeks ago in response to Donald Trump’s tariffs on steel and aluminium. The US president has also promised to levy 25% on $60bn in annual imports from China. |
| The Beijing ministry said “a large number of people expressed their support” for the measures in order to “safeguard the interests of the country and its industry”. | The Beijing ministry said “a large number of people expressed their support” for the measures in order to “safeguard the interests of the country and its industry”. |
| It added that China and the US should resolve issues through negotiation and dialogue. “As the world’s two largest economies, cooperation is the only correct option.” | It added that China and the US should resolve issues through negotiation and dialogue. “As the world’s two largest economies, cooperation is the only correct option.” |
| Beijing had announced fresh tariffs on imports of 128 US products, a market worth almost $3bn per year. | Beijing had announced fresh tariffs on imports of 128 US products, a market worth almost $3bn per year. |
| The measures include a 25% tariff on a range of pork products, covering fresh and frozen imports of items such as forelegs and chops. | |
| A 25% tariff will also be imposed on aluminium scrap. | A 25% tariff will also be imposed on aluminium scrap. |
| A lower tariff, of 15%, is being imposed on a wide range of other products: | A lower tariff, of 15%, is being imposed on a wide range of other products: |
| Fresh fruit, including oranges, lemons, grapes, apples and watermelon | Fresh fruit, including oranges, lemons, grapes, apples and watermelon |
| Dried fruit and nut products, including cashews, Brazilian nuts, almonds, dates and coconut | Dried fruit and nut products, including cashews, Brazilian nuts, almonds, dates and coconut |
| Wine, both still and sparking | Wine, both still and sparking |
| Modified ethanol, | Modified ethanol, |
| Ginseng, including American ginseng | Ginseng, including American ginseng |
| Stainless steel pipes, including boiler tubes, and oil and gas drilling pipes | Stainless steel pipes, including boiler tubes, and oil and gas drilling pipes |
| An editorial in China’s Global Times newspaper warned that America could “say goodbye to the delusion” that China wouldn’t retaliate against Trump’s tariffs on aluminium and steel. | An editorial in China’s Global Times newspaper warned that America could “say goodbye to the delusion” that China wouldn’t retaliate against Trump’s tariffs on aluminium and steel. |
| “Even though China and the US have not publicly said they are in a trade war, the sparks of such a war have already started to fly,” the newspaper said. | “Even though China and the US have not publicly said they are in a trade war, the sparks of such a war have already started to fly,” the newspaper said. |
| But analysts say the fact that China’s tariffs do not cover some of the US’s biggest exports to China, such as soybeans, is a sign Beijing wants to avoid an all-out trade war. | But analysts say the fact that China’s tariffs do not cover some of the US’s biggest exports to China, such as soybeans, is a sign Beijing wants to avoid an all-out trade war. |
| “The amount subject to tariff is not big, which shows China is willing to ease the intensity of the trade conflict that was started by the US. Trump gave us a heavy shot, and China is giving a light shot back,” said Shi Yinhong, director of the US research centre at Renmin University in Beijing. | “The amount subject to tariff is not big, which shows China is willing to ease the intensity of the trade conflict that was started by the US. Trump gave us a heavy shot, and China is giving a light shot back,” said Shi Yinhong, director of the US research centre at Renmin University in Beijing. |
| China’s economic czar Liu He spoke with US treasury secretary Steve Mnuchin last week over the phone. Mnuchin is reportedly considering a trip to China to continue talks. | China’s economic czar Liu He spoke with US treasury secretary Steve Mnuchin last week over the phone. Mnuchin is reportedly considering a trip to China to continue talks. |
| Still, some in China are calling for stronger retaliatory measures on soybeans and other agricultural products as well as big-ticket US goods such as Boeing aircraft. China, the third largest consumer of US pork, bought $1.1bn in pork products from the US last year, according to the US Meat Export Federation. | Still, some in China are calling for stronger retaliatory measures on soybeans and other agricultural products as well as big-ticket US goods such as Boeing aircraft. China, the third largest consumer of US pork, bought $1.1bn in pork products from the US last year, according to the US Meat Export Federation. |
| The state-owned Xinhua news on Monday called Trump’s tariffs a “self-defeating gamble.” The editorial, published in English, said, “The threatening tariffs, if realized, may hurt China. Yet the damage will be done at the expense of enormous American interests.” | The state-owned Xinhua news on Monday called Trump’s tariffs a “self-defeating gamble.” The editorial, published in English, said, “The threatening tariffs, if realized, may hurt China. Yet the damage will be done at the expense of enormous American interests.” |
| US senator Elizabeth Warren said on a three-day visit to China that US policy towards China up to now has been “misdirected” and she was not afraid of tariffs. | US senator Elizabeth Warren said on a three-day visit to China that US policy towards China up to now has been “misdirected” and she was not afraid of tariffs. |
| “We told ourselves a happy face story that never fit with the facts. Now US policymakers are starting to look more aggressively at pushing China to open up the markets without demanding a hostage price of access to US technology,” she said on Sunday in Beijing. | “We told ourselves a happy face story that never fit with the facts. Now US policymakers are starting to look more aggressively at pushing China to open up the markets without demanding a hostage price of access to US technology,” she said on Sunday in Beijing. |
| With US-China ties at a low, analysts say the countries are likely to keep struggling over trade. | With US-China ties at a low, analysts say the countries are likely to keep struggling over trade. |
| “Even if this conflict can be eased, it won’t last long. There will be rounds after rounds of trade wars in the future,” said Shi. | “Even if this conflict can be eased, it won’t last long. There will be rounds after rounds of trade wars in the future,” said Shi. |
| Additional reporting by Wang Xueying | Additional reporting by Wang Xueying |
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