Dow Jones drops 219 points after Trump unveils China tariffs

Dow Jones drops 219 points after Trump unveils China tariffs

Both governments have raised tariffs on $34 billion worth of each other's goods and already said they are considering additional charges on another $16 billion.

A Commerce Ministry statement said, "It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating".

The Commerce Ministry on Wednesday gave no details, but Beijing responded to last week's U.S. tariff hike on $US34 billion ($A46 billion) of imports from China by increasing its own duties on the same amount of American goods. "The Chinese government as always will have no choice but to take the necessary countermeasures", it said.

S&P 500 and Dow futures were down 0.9 per cent and 1 per cent, respectively, pointing to a lower open for Wall Street later in the day.

Administration officials said a two-month process will allow the public to comment on the proposed tariffs before the list is finalized.

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The new list of tariff targets from the US Trade Representative includes vacuum cleaners, furniture and auto and bicycle parts, but US-branded smartphones and laptops were excluded. But President Donald Trump's measures targeting Chinese medical, construction and factory equipment hit small exporters that say price-conscious American customers have stopped buying.

The tariffs, which could go into effect as soon as this fall, are in addition to the 25 per cent duties Trump imposed on US$34 billion worth of Chinese goods July 6.

Forty percent of Chinese export goods and two thirds of its export high-tech products are made by foreign enterprises in China, according to Hua.

The initial US tariff list focused on Chinese industrial products in an attempt to limit the impact on American consumers. It left untouched US -branded smartphones and laptop computers.

ASIA'S DAY: Japan's benchmark Nikkei 225 fell 1.2 percent to 21,932.21 and South Korea's Kospi lost 0.6 percent to finish at 2,280.62.

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Senate Finance Committee Chairman Orrin Hatch, a senior member of Trump's Republican Party, said the announcement "appears reckless and is not a targeted approach".

The US Chamber of Commerce also criticized the administration's move.

Jack Ablin, chief investment officer for Cresset Wealth Advisors, said tariffs can have big effects: a tariff on an import from one country can lead to broad price increases for similar items, and rising taxes and costs might cause companies to change their supply lines in less efficient ways.

The U.S. economy is in what many would consider "goldilocks" mode-with unemployment at lows not seen in almost two decades and strong GDP growth. The ministry said it would also double efforts to get the World Trade Organisation to block Washington's efforts to penalise China for the wrong reasons. During a visit to Germany this week by Chinese Premier Keqiang Li, the countries signed business deals worth more than $23 billion.

"The moves in the trade dispute situation have been for global yields to drop the US dollar and yen to be preferred in the currency markets, and equities to make a correction in prices and all these actions will happen in a knee-jerk reaction overnight", said Richard Perry, market analyst at Hantec Markets.

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