U.S. stock markets fall sharply amid fears of global trade war

Trump said that if China responds to this fresh round of tariffs then he will move to counter

Trump threatens additional tariffs on $200 billion of Chinese goods

Trump agreed to end a ban on the sale of US parts to Chinese telecommunications firm ZTE, while celebrating China's offer to increase its importation of American farm products as a major trade victory. By most accounts, Beijing has made a routine practice of stealing American intellectual property - as part of its broader "Made in China 2025" project, which aims to position China as a dominant force in the high-tech industries of the future.

The tariffs were quickly matched by China on U.S. exports, including lobsters and soybeans, a move that drew the president's ire.

Navarro also disputes any notion that the trade standoff would damage the broader relationship with China.

Michael Wilson, Morgan Stanley's Chief U.S. Equity Strategist, says the White House could be encouraged by Chinese stocks falling.

According to a report in Monday's New York Times, in the midst of the escalating trade war rhetoric between the us and China, Apple CEO Tim Cook has allegedly been given a promise from the Trump administration that the Apple iPhone, assembled in China, will not be slapped with any tariffs for its trip across the USA border. "But the United States will no longer be taken advantage of on trade by China and other countries in the world". The next round will nearly certainly have to tax some consumer goods to reach the $200 billion target, perhaps making them less politically palatable.

The escalation in trade tensions comes at an inopportune time for China's policy makers, with indicators for May suggesting growth is already dialing back a notch.

The China trade offensive is only one side of Trump's multi-front battle with the United States' economic partners as he presses ahead with his protectionist "America First" agenda.

Even with tariffs on an additional $200 billion in Chinese goods, the impact on both China's and the USA economy is set to be small, most economists say.

The US leader warned Friday of "additional tariffs" should Beijing hit back with tit-for-tat measures. Jacob Parker, vice president of China operations at the U.S.

"If people thought this was really going to be a trade war, stocks would be down a lot more".

But Beijing faces challenges in retaliating directly: China ships far more goods to the United States ($505 billion past year, according to USA figures) than come back in the opposite direction ($130 billion).

Also on Monday, Trump threatened to impose more tariffs on another $200 billion worth of Chinese goods if Beijing continues to retaliate.

"The trade relationship between the United States and China must be much more equitable", he said in explaining his latest decision.

In April, the Trump administration outlined around 1,300 products worth $50 billion that would be hit with proposed tariffs.

Benchmark U.S. crude lost 88 cents to $64.97 per barrel in electronic trading on the New York Mercantile Exchange.

In a statement published shortly after Monday's announcement, China's Ministry of Commerce called the move "blackmail".

The White House hasn't set a date for the imposition of any new tariffs beyond the initial list.

"Beijing will not panic in response to Trump's latest threat, but will be deeply concerned", said Eurasia Group in a report.

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