China may have ‘underestimated’ Trump’s resolve 

Beijing has accused the United States of “extreme pressure and blackmailing” and vowed to retaliate after Mr Trump threatened more tariffs on $200bn of Chinese products.

The United States has now imposed tariffs on up to $450bn in Chinese goods, out of a total of $500bn of imports.

“The fundamental reality is that talk is cheap,” White House adviser Peter Navarro told reporters on a conference call, adding Beijing “may have underestimated the resolve of President Donald J. Trump”.

“If they thought that they could buy us off cheap with a few extra products sold and allow them to continue to steal our intellectual property and crown jewels, that was a miscalculation,” he added.

“Our phone lines are open; they have always been open,” said Mr Navarro, who has taken a hard-line stance against Beijing.

But he denied the latest dispute would damage the relationship between the two countries.

“This is a trade dispute – nothing more, nothing less,” he added. “President Trump has a great relationship with President Xi (Jinping of China).”

Investors had hoped Mr Trump’s loud threats were nothing more than bluster but as a trade war looms between the world’s two biggest economies, global stocks markets sank.

On Wall Street, the Dow Jones Industrial Average closed down 1.1% on Tuesday.

On Friday, the US decided to impose 25% tariffs on $50bn of Chinese products.

Beijing immediately retaliated by matching the US levy, but Mr Trump asked officials on Monday to identify $200bn of Chinese goods to be subject to a 10% tariff.

Newsdesk

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