Looming Trade War Could Hurt US-China Cooperation On North Korea

It labeled the move "extreme pressure and blackmail", and said it would retaliate with counter measures.

Trade brinkmanship between Washington and Beijing continued late Monday when President Donald Trump threatened to put fresh duties on between $200 billion and $400 billion in Chinese imports.

Analysts estimate that the full impact of all measures threatened by Trump could shave as much as half a percentage point off China's economic growth.

"This is an unexpected move and clearly an escalation in both trade war rhetoric, and downside risk", said Chris Payne, managing director at GWM Investment Management.

Trump's tariffs target goods the White House says benefit from industrial policies that China's trading partners say violate its market-opening pledges. Not only that but possible expansion globally of the treat now looks more real.

She said the government has finished consulting with Canadians on its proposed list of American consumer goods - dozens of items from Kentucky bourbon, to candles, to felt-tipped pens - and will be making some tweaks on which ones will be slapped with new duties. More American targets are likely to follow as soon as the Trump administration follows through with publishing an expanded tariff list. That might cut into demand for the device, acting as an extra tax on USA consumers, but it would protect Apple's profit margins on its popular smartphone line.

"The collateral damage from an escalating U.S".

The United States and China edged closer today to triggering the riskiest trade war in decades, a fight that could weaken the world's two largest economies, unsettle relations between Beijing and Washington and crimp global growth. It has promptly matched every USA threat with its own.

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The US tariffs could cost China 0.05 percent of its GDP this year and 0.1 percent next year.

Kate Warne, investment strategist for Edward Jones, said investors are concerned about what they're seeing, but they still think the US and China will work out their differences.

In addition to trade concerns, the euro slumped to a two-week low of $1.1528 after European Central Bank President Mario Draghi called for a patient approach to European monetary policy at a forum in Portugal. It injected another 200 billion yuan ($31 billion) into the economy via its medium-term lending facility on Tuesday, pushing its net injections so far in June to the most in any month since December 2016. Trump went on to threaten additional rounds of tariffs that could affect $400 billion worth of products, an amount approaching the $505 billion of goods that Chinese ships to the US. A counter punch was swift in coming, with a statement from Beijing on Friday night that it would "strike back forcefully".

The administration says that China is trying to maintain a permanent and unfair advantage. But if trade relations get worse, it could be much less politically appealing for the US and China to collaborate on North Korea.

FILE - China's President Xi Jinping speaks at the World Economic Forum in Davos, Switzerland, Jan. 17, 2017.

Shares in ZTE dived after the Senate passed legislation on Monday evening that would restore penalties.

It based its analysis on a 12 per cent average USA tariff on US$450 billion of imports from China, estimating that this would add just 0.4 percentage points to United States consumer price inflation if the additional costs of the duties were passed on to consumers in their entirety.

Throughout the last few weeks, the trade war talk has anxious many people, but Ives insists that it poses no real threat. "They have always been open", said Navarro.

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