China 'underestimated' Trump, a key adviser says

Trump escalates China trade war with extra tariffs

China slams US threat to impose tariffs on $200 billion in imports

Kim Hyo-sun tells us more.

Navarro also disputes any notion that the trade standoff would damage the broader relationship with China. Apple was down 1.9 percent at $185.20 in afternoon trading in NY.

S&P 500 futures were off 0.6 percent, pointing to a another down day for Wall Street shares which slipped on Monday.

Trump said that he had ordered US Trade Representative Robert Lighthizer to identify a second tranche of goods imported from China for tariffs of 10 per cent.

"If China takes any actions to harm our companies operating in China or otherwise try to harm any corporate entity, farmer, ranch or whatever, those constitute actions which aren't acceptable and this president will have the back of Americans whether they're here on a farm in Iowa or Shanghai trying to operate". While the U.K.'s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index and the German DAX Index slumped by 1.1 percent and 1.2 percent, respectively. Shares of large USA companies with significant overseas business were hit especially hard. Aerospace giant Boeing fell 3.4 percent and DowDuPont slipped 3.3 percent.

European companies have been bystanders to the U.S.

Trump has raised trade tensions on other fronts as well. Oil and copper each dropped 1.5 percent.

Japan's Nikkei sank 0.8 percent as worries over growing protectionism overshadowed stronger-than-expected export data. One reason for China to act quickly to bring US trade negotiators to the table is the damage to its own stock markets.

The Dow Jones industrials are down 318 points, or 1.3 percent, to 24,668.

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In April, Attorney-General Jeff Sessions adopted a "zero tolerance " approach to illegal border crossings at the US-Mexico border. Back on Capitol Hill, Homeland Security Secretary Kirstjen Nielsen was set to meet with a larger group of House Republicans.

The S&P/TSX composite index closed down 67.10 points at 16,316.53, led by losses in the base metal sector.

"Faced with this heightened intimidation from the U.S., China has no choice but to fight back with targeted and direct measures aimed at persuading the U.S.to back off, since it appears that any concessions it makes will not appease the Trump administration, which wants to suck the lifeblood from the Chinese economy", the paper said.

But such a move would have the support of several southern state lawmakers, including senator John Kennedy, a Louisiana Republican, who wrote Trump an April 17 to add shrimp and crawfish from China to the list of items that should get tariffed. That follows brisk selling in worldwide markets.

Bond prices climbed as investors turned more cautious.

The Canadian dollar averaged 75.32 cents United States, down 0.39 of a USA cent, as it continues to face the twin pressures of rising U.S. rates and trade fears, especially related to NAFTA.

"There are trade frictions not only between the US and China but also between the USA and its allies".

To respond to Trump's threat to impose tariffs on as much as $250 billion worth of Chinese goods, Beijing would have to find other ways to respond.

"This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods", Trump said of China's retaliatory tariffs.

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