Threat from Trump leads to Chinese market fall
Stock markets in China tumbled yesterday after Donald Trump threatened Beijing with increased tariffs on $200bn (£152bn) of goods.
The president's surprise outburst risks derailing talks aimed at resolving the trade war between the world's two biggest economies.
A Chinese delegation is scheduled to resume talks in Washington tomorrow but US media reported they have considered cancelling the meeting.
Hong Kong's Hang Seng index dropped 3.1% following Mr Trump's tweet, while the Shanghai Composite fell by nearly 6%. Chinese government officials did not immediately respond to requests for comment.
Mr Trump wrote on Twitter that he would increase tariffs on $200bn of goods from 10% to 25% on Friday and announced tariffs at 25% on $325bn of additional goods. Government officials in Beijing have previously told the US they would not negotiate under pressure.
Jake Parker, vice president of the US-China Business Council, said Mr Trump's threat makes the talks "very difficult politically" for Xi Jinping's government, as the Chinese public may view an agreement by the Friday deadline as a "capitulation".
Although Mr Trump has twice pushed back deadlines for raising the tariffs - in January and March - he said he had lost patience with the negotiations.
"The tariffs paid to the USA have had little impact on product cost, mostly borne by China. The trade deal with China continues, but too slowly, as they attempt to renegotiate. No!" he said.
Mr Trump has portrayed his tariffs as beneficial for the US economy and claimed previous administrations have let China get away with abusive trade practices. However, economists have found that the burden of the tariffs falls on US consumers and businesses.