Beijing has vowed to "fight back as usual" after Donald Trump’s tit-for-tat trade war with China escalated once again last night.
Washington threatened to slap a further $200bn (£150.8bn) worth of tariffs on a wide range of Chinese goods such as coal, tobacco and consumer electronics after talks between the two superpowers to ease tensions failed yesterday.
White House officials said the president has asked US trade representative Robert Lighthizer to begin preparations for levies of 10 per cent on a host of consumer products, just days after the two economic giants hit one another with $34bn export tariffs.
The dramatic move by Trump sent a shockwave through Asian markets last night, with the Shanghai Composite index dropping 2.1 per cent and the CSI300 index of major Shanghai and Shenzhen stocks tumbling 2 per cent.
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Lighthizer said last night: "For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition."
Thousands of Chinese imports are under threat in the newly suggested tariffs, including hundreds of food products as well as car tires, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.
However, in a statement this morning the Chinese ministry of commerce hit back, saying: "China is shocked by US behaviour. In order to safeguard the core interests of the country and the people, China will have to fight back as usual."
Investor confidence started to return early this week amid a momentary lull in the trade war, following Beijing's retaliation tariffs on US imports last week after Trump hit China with a 25 per cent tariff worth $34bn on imports.
Trump, who is set to visit the UK this Friday, has made the clampdown on Chinese goods one of his key campaign pledges, gaining support from manufacturing industries which have been undercut by cheaper imports from China.