China hits back at Pompeo; accuses USA of blackmail tactics

The trade relationship between the United States and China must be much more equitable     
       President Trump

The major averages all finished the session in the red, although the Dow underperformed its counterparts by a wide margin.

The Dow Jones industrials are up 30 points, or 0.1 percent, to 24,730, after falling 287 points Tuesday.

The sell-off came after President Donald Trump threatened to impose tariffs on an additional $200 billion in imports from China, and the Chinese government said it would retaliate. These penalties would take effect, the White House said, "if China refuses to change its practices" and proceeds with its plans for retaliatory tariffs.

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.

The move comes just three days after the president enacted an initial $50 billion in imports that would be taxed an additional 25 percent, which he said was punishment for the theft of intellectual property from US companies, as well as the trade gap between the two countries.

"The on-again off-again possible global trade war is looking to be back on again as the USA and China announced tariffs on each other's imports", said Nick Twidale, Sydney-based analyst at Rakuten Securities Australia. "We do our best to call out unfair economic behaviors as well". "The trade relationship between the United States and China must be much more equitable", he said.

"If the United States loses its senses and comes up with a new list, China will be forced to strike back hard, and launch comprehensive measures that match the USA move in quantity and quality", the Chinese Commerce Ministry said in a statement Tuesday.

"The trade war waged by the U.S. is against both the law of the market and the development trend of today's world".

ENERGY: Benchmark U.S. crude lost 88 cents to $64.97 per barrel in electronic trading on the New York Mercantile Exchange. Aerospace giant Boeing fell 3.4 percent and DowDuPont slipped 3.3 percent. Apple was down 1.9 percent at $185.20 in afternoon trading in NY.

Boeing, the single largest United States exporter to China, slipped 0.8 percent, while construction equipment maker Caterpillar fell 1.3 percent.

"This all shows how quickly trade tensions could escalate between the U.S. and China", said Derek Halpenny, European head of global markets research at MUFG Bank.

Transportation, semiconductor, and computer hardware stocks also saw notable weakness, while biotechnology and utilities stocks showed strong moves to the upside.

Shanghai stocks tumbled almost 4 percent on Tuesday to a two-year low, while the yuan fell to a more-than-five-month low against the dollar as Washington's fresh tariff threats against China raised the spectre of a full-blown trade war.

In Hong Kong, the Hang Seng Index fell 2.78% to close at 29,468.15 points, while the China Enterprise Index shed 3.18% to finish at 11,492.77.

The euro's slump yesterday had sent European stocks rallying the same day as a cheaper euro boosts the bloc's exporters. The Nasdaq composite is up 65 points, or 0.9 percent, to 7,790.

Navarro also indicated that no trade talks with China were planned but said the administration was willing to hold discussions. While chips were largely spared from the initial list of targeted goods released in April, U.S. trade officials on Friday released a second tariff list of 284 products worth $16 billion that includes the processor and memory chips at the heart of Intel's business.

A panel discussion involving Federal Reserve Chairman Jerome Powell, European Central Bank President Mario Draghi, Bank of Japan Governor Haruhiko Kuroda, and Reserve Bank of Australia Governor Philip Lowe may also attract some attention.

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