Oil prices fell more than 1% on Friday after US President Donald Trump threatened new tariffs on China, reigniting fears of a trade war between the world's two largest economies that could hurt global growth.
In Trump's latest salvo, he said late on Thursday that he had instructed USA trade officials to consider $100 billion in additional tariffs on China. The situation has only intensified in the following weeks: The U.S. imposed tariffs on numerous imported Chinese goods, which China answered with tariffs on 128 U.S. products, including everything from fruit to meat to nuts.
China will continue reforms and opening up, safeguard multilateral trade, and promote trade and investment liberalisation, the spokesperson said.
He also tweeted Friday morning, "Despite the Aluminum Tariffs, Aluminum prices are DOWN 4%".
Trump's current list of goods that will be affected by the tariffs ranges across 1,300 categories, while China is only targeting 106 classes of USA exports, including everything from soybean to passenger planes.
Earlier in the week, Beijing announced separate import duties on $3 billion United States of goods in response to the Trump administration's duties on all steel and aluminum imports, including from China.
The US, the world's largest economy, has a trade deficit of nearly $500 billion with China, the world's second largest economy.
The further tariffs were being considered "in light of China's unfair retaliation" against earlier U.S. trade actions. "None of this supports growth and employment".
"No tariffs will go into effect until the respective process is complete", Lighthizer said. "If US tariffs were used as a tool to reverse some of that, and shift the trend in a better direction, maybe it's actually a good thing". China retaliated Wednesday by announcing plans to impose levies on $50 billion worth of major USA exports such as soybeans, cars and small aircraft. The latest drop came as the White House proposed tripling the amount of goods from China that will be subject to tariffs.
And going after American companies, he said, would further anger the White House and "pretty soon we're approaching meltdown".
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Trump also explained that he has asked Agriculture Secretary Sonny Perdue "to use his broad authority to implement a plan to protect our farmers and agricultural interests".
The next step in the process may be for US negotiators to give a list of "suggestions" to their Chinese counterparts in an effort to settle ongoing disputes, Kudlow said.
Trade-offs or trade war?
Were China to want to match Trump's latest threat in kind, it wouldn't have enough American goods imports to target.
Oil prices tumbled, with USA crude falling about 2 percent.as China is a large importer of US crude oil.
"This is starting to feel like the beginnings of a trade war, if simply each proposal is matched with a retaliation", said Patrick Bennett, a Hong Kong-based strategist at Canadian Imperial Bank of Commerce.
As of February, the USA also had a record-high $375.2 billion trade deficit with China, meaning it spends considerably more on Chinese imports than it makes on exports sent to China.
In an editorial published Friday, the Global Times, a party-controlled newspaper known for its nationalist tone, dismissed Trump's Thursday evening statement as a sort of presidential temper tantrum.
"You have to go after the people who aren't treating you right", Trump said in West Virginia.
But China could benefit in the longer term if it moved in the direction the USA had been pushing by relaxing the ruling Communist Party's control over markets and allowing for greater productivity growth.