Markets fall as Trump vows new trade tariffs on China
US President Donald Trump said yesterday he would impose a 10pc tariff on the remaining $300 billion (€271bn) of Chinese imports starting on September 1, after negotiators failed to make progress in US-China trade talks, sending shockwaves through US markets.
The levies - which would hit a wide swath of consumer goods from mobile phones and laptop computers to toys and footwear - ended a temporary truce in a trade war that has disrupted global supply chains and roiled financial markets for more than a year.
Trump later told reporters he could further ratchet up the tariff rate - even beyond 25pc - depending on progress in talks with Chinese President Xi Jinping.
"I think President Xi ... wants to make a deal, but frankly, he's not going fast enough," Trump said.
The news hit US financial markets hard.
Oil prices plummeted 7pc, with Brent crude registering the biggest daily percentage drop since February 2016. The benchmark S&P 500, which had been in solidly positive territory yesterday afternoon, closed down 0.9pc.
Moody's predicted the new tariffs would weigh on the global economy at a time when growth is already slowing in United States, China and the euro zone.
The tariffs may also force the Federal Reserve to again cut interest rates to protect the US economy from trade-policy risks, experts said.
Trump announced the new tariffs in a series of tweets, faulting China for not stepping up to buy more US agricultural products and criticising Xi for not doing more to stem sales of the synthetic opioid fentanyl.
Another round of trade tlaks are scheduled for September.