Shares knocked lower after new USA tariff threat on Chinese goods

He said an announcement on an additional $200 billion of tariffs on Chinese goods were "coming soon".

China is reportedly threatening to pull out of trade negotiations if the United States levies new tariffs, and the Foreign Ministry on Monday said it would respond in kind if the U.S. were to levy fresh tariffs.

President Trump has threatened to intensify his tariff assaults on nations which fail to bow to America's trade demands as China braced for a fresh attack.

The US imports around $500 billion in goods from China.

China had issued a list of another $60 billion of US goods for retaliation if the USA proceeds with more tariffs.

In July, Trump announced that his administration would offer a $12 billion emergency plan to help offset farmers hard hit by retaliatory tariffs imposed on agricultural products like soybeans, pork and dairy by China and other countries.

In Beijing, China's foreign ministry has already vowed to strike back.

The green light for the tariffs initially dragged US stocks lower, fueling drops in the Chinese yuan in offshore trading and gains in the dollar index.

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Only last week, Beijing said it welcomed overtures from United States officials offering to re-start trade talks, but press reports indicate China would call off any meetings if the new punitive duties take effect. The White House had no immediate comment on Monday.

Trump defended his policies in an early-morning tweet on Monday, writing: "Tariffs have put the U.S.in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been nearly unnoticeable".

"They want to make a deal", Trump said.

While US inflation has continued to rise steadily albeit modestly, firms across the country report lost businesses, layoffs and possible bankruptcies as input costs rise and exports fall. If China doesn't make concessions, the new tariffs will then jump to 25 percent, a senior administration official said.

A lower tariff rate could soften the blow to USA consumers and manufacturers among others ahead of key United States congressional elections in November.

The Journal cited unnamed people familiar with the matter who said the tariff level will likely be set at about 10 percent, below the 25 percent announced earlier this year.

Lobbying against the tariffs has risen sharply in Washington but Trump's policy has left candidates in competitive races for November's hard-fought midterm congressional elections in awkward positions.

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