The threat had an immediate impact on the market as in NY, the Dow Jones industrial average lost more than 300 points, or about 1.3pc, in early trading on Tuesday.


"These actions cause the United States to lose credibility in the world's eyes, and harm the interests of USA and Chinese people and companies". In Europe, Germany's main index was off 1.3 percent and France's lost 1.1 percent.

The Business Roundtable, representing companies with more than $7 trillion in annual revenue, said the administration's feud with China "will only make it harder to achieve a fair and level playing field for American companies to compete in China".

"As China hawks, like (Robert) Lighthizer and (Peter) Navarro, appear to have gained power within the Trump administration lately, an all-out trade war now seems more inevitable", said Yasunari Ueno, chief market analyst at Mizuho Securities.

Trump said Monday night that If China "refuses to change its practices" then the additional levies would be imposed on Beijing.

Trump had announced a 25 percent tariff on up to $50 billion in Chinese imports.

Neither side has yet imposed tariffs on the other in their growing dispute over technology and the US trade gap. Another 280 or so still need to undergo a public comment period, and will take effect later.

TRADE TENSIONS: Trump directed the U.S. Trade Representative to prepare new tariffs on $200 billion in Chinese imports, stepping up a dispute companies and investors worry could drag down global trade and economic growth. China's tariffs would target agricultural products, cars and seafood, among other items.


"Every asset class is affected now by the U.S".

The United States and China have the world's biggest trading relationship but official ties are increasingly strained over complaints Beijing's technology development tactics hurt American companies. China threatened to retaliate, leading Trump to propose broader penalties.

"If prices of imported goods are rising for the US consumer at an unmanageable rate, then there is a large part of the USA voting population that maybe will feel their money not going as far", she said.

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 previous year.

The U.S. Tire Manufacturers Association, which said the earlier tariffs would harm its members, declined to comment on the action against China.

Tariff hikes imposed so far by Trump affect a total of $109 billion of imports, according to Morgan Stanley.


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