US-China trade war escalates

Beijing : The United States and China imposed fresh tariffs on each other’s goods yesterday as the world’s biggest economies showed no signs of backing down from an increasingly bitter trade dispute that is expected to knock global economic growth. Soon after the new duties went into effect, China accused the U.S. of engaging in “trade bullyism” and said it was intimidating other countries to submit to its will, the official Xinhua news agency said, reiterating China’s willingness to fight if necessary.

But Beijing also said it was willing to restart trade negotiations with the United States if the talks are “based on mutual respect and equality,” Xinhua said, citing a white paper on the dispute published by China’s State Council. U.S. tariffs on $200 billion worth of Chinese goods and retaliatory tariffs by Beijing on $60 billion worth of U.S. products took effect at midday Asian time, though the initial level of the duties was not as high as earlier feared.

Stocks on Wall Street opened lower. Boeing, the biggest U.S. exporter to China, dropped 1 percent and Caterpillar 0.5 percent, leading the losers on the Dow Jones Industrial Average. Network equipment makers Cisco and Netgear were also lower. “One of the bigger risks with these tariffs going into effect is that the United States may be pushed out of the Chinese market and it is a growing market,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

The Dow Jones Industrial Average fell 56.31 points, or 0.21 percent, to 26,687.19, the S&P 500 lost 7.51 points, or 0.26 percent, to 2,922.16 and the Nasdaq Composite dropped 45.88 points, or 0.57 percent, to 7,941.08. Moody’s said Monday additional U.S. tariffs on Chinese imports are negative for various sectors in both countries and could spread beyond targeted sectors, adding that tariffs are credit negative for U.S. furniture & home goods retailers, with more than half their imports coming from china last year.