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Stock markets tumble as Trump threatens new Chinese tariffs

23/03/2018

China says it does not want a trade war, but is not afraid of one

Stock markets in Asia have fallen today after US President Donald Trump unveiled plans for tariffs on up to US$60 billion of Chinese products, with concerns these could trigger a trade war.

Japan’s Nikkei 225 index fell 4.5% and the Shanghai Composite closed down 3.6% while Hong Kong's Hang Seng index ended 2.5% lower, the BBC reported. China responded by saying that while it did not want a trade war, it was “absolutely not afraid” of one.

The White House said it had a list of more than 1,000 products that could be targeted by tariffs of 25%. Businesses will have the opportunity to comment before the final list goes into effect, the BBC said.

The US is also exploring ways to limit Chinese investment in the US. It says it will bring any matter it thinks is unfair to the WTO − as it is doing in the case of intellectual property.

Trump’s proposed tariffs are a response to allegations of intellectual property theft by China, with the US launching a complaint against China at the World Trade Organization (WTO). The US said: “China appears to be breaking WTO rules by denying foreign patent holders, including US companies, basic patent rights to stop a Chinese entity from using the technology after a licensing contract ends. China also appears to be breaking WTO rules by imposing mandatory adverse contract terms that discriminate against and are less favourable for imported foreign technology.”

China today announced its own set of proposed tariffs worth $3bn in response to US tariffs on steel and aluminium imports announced by Trump earlier this month that come into effect this week. China said it was planning two steps of retaliatory action: a 15% tariff on 120 goods worth almost $1bn - including fresh fruit, nuts and wine; and a 25% tariff on eight goods worth nearly $2bn - including pork and aluminium scrap.

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