Trump threatens 10% tariffs on China; stocks plummet on news

Trump says he will impose new tariffs on $300 billion in Chinese imports starting next month, ending brief cease-fire in trade war

Trump threatens 10% tariffs on China; stocks plummet on news

The 10 percent duties will take effect September 1, and come on top of the 25 percent tariffs on $250 billion in imports - meaning Trump now has targeted virtually all of the $500 billion in goods America buys from China every year.

In announcing the new tariffs, Trump said China had pledged to increase purchases of U.S. agricultural products, but did not, and also alleged Beijing reneged on a promise to stop the sale of Fentanyl to the US.

The president's action comes just a day after trade negotiators returned from China from trade negotiations that failed to produce a breakthrough but that the White House described just Wednesday as "constructive" and said talks would continue Washington in September.

On Thursday, Mr Trump's former chief economic adviser, Gary Cohn, said in a BBC interview that the tariff battle was having a "dramatic impact" on USA manufacturing and capital investment.

US stocks pared gains on the news, while yields on 10-year Treasuries fell to the lowest since 2016.

Stephen Lamar, executive vice president of the American Apparel & Footwear Association, told Reuters the tariffs would be "hugely disruptive", and would drive prices for consumers higher since they can not easily be absorbed in the supply chain.

Stocks had been rebounding from the Fed-induced sell-off Wednesday before Trump put trade back at the center of investor minds.

The president's tweets followed a briefing by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on their talks in Shanghai, their first face-to-face meeting with Chinese officials since Trump and Xi agreed to a trade ceasefire at a G20 summit in June.

USA and Chinese negotiators ended two days of talks in Shanghai on Wednesday with little sign of progress, although both countries described the negotiations as constructive.

The U.S. has already implemented 25 percent tariffs on $250 billion worth of Chinese goods.

Trump's remarks came just after a U.S. delegation met with Chinese officials earlier this week, the first in-person talks to be had since officials' May breakdown.

Mr Trump issued the tariff threat in a series of tweets.

Another meeting between the US and China is set for September in Washington, D.C.

The United States and China have been locked in a trade war marked by tit-for-tat tariffs since a year ago. Negotiations have been at an impasse since May after the US said the Chinese reneged on provisions of a tentative deal.

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