Ernst: Trump tariffs on China are a tax on farm families

It’s getting ugly in China

Trump says he'll impose tariffs on an additional $200 billion in goods from China in addition to tariffs announced earlier, which Ernst says puts USA producers at risk of permanently losing valuable market access.

The S&P 500 index and the Nasdaq composite are also lower.

The top White House trade adviser, Peter Navarro, says Beijing "may have underestimated the resolve of President Donald J. Trump" by refusing to meet US demands on trade and by threatening to retaliate against American trade sanctions. Beijing matched that total with a tax on US goods.

But for USA importers looking to get tariff-hit cargo from China before the July 6 deadline, it could pay to use air freight instead.

But Beijing's mention of "comprehensive measures" suggests that it would go beyond tariffs, said Jake Parker of the U.S.

Mr Trump said that if China responds to this fresh round of tariffs, then he will move to counter "by pursuing additional tariffs on another 200 billion dollars of goods".

The Dow was trading at 24,694 as of 12:10 p.m. The S&P 500 index gave up 17 points, or 0.6 percent, to 2,756.

Spreadbetters expected Britain's FTSE to open down 0.3 percent, with Germany's DAX seen shedding 0.7 percent and France's CAC losing 0.8 percent.

Boeing, the single largest USA exporter to China, slipped 0.8 percent, while construction equipment maker Caterpillar fell 1.3 percent.

The United States and China have the world's biggest trading relationship but official ties are increasingly strained over complaints Beijing's industry development tactics violate its free-trade pledges and hurt American companies. That makes US goods more expensive in other markets.

Trump is gambling Beijing has the most to lose.

China is retaliating by raising import duties on $34 billion worth of American goods.

Small-caps were hit harder, with the start-up board ChiNext, and Shenzhen's SME board tumbling roughly 4 percent.

These include major American exports to China such as soybeans, which brought in $14 billion in sales previous year and are grown in states that supported Trump during the 2016 presidential election. Saudi Arabia and Russian Federation are seeking to raise production by 1.5 million barrels per day, but they may not get their way, experts say.

The dollar index rose 0.01 percent, with the euro up 0.07 percent to $1.1615.

The Japanese yen strengthened 0.45 percent versus the greenback at 110.07 per dollar.

Steel companies also took sharp losses.

USA long-dated Treasury yields were volatile after a hectic week when the Federal Reserve struck an upbeat tone on the US economy.

While there are no winners in a trade war, the USA is focused on protecting United States technology and sees the tariffs on Chinese tech products as a legitimate action.

JD.Com's US-listed shares were up 2.5 percent after Alphabet's Google invested $550 million in the Chinese e-commerce powerhouse.

Bond prices climbed as investors turned more cautious.

The 10-year U.S. Treasury note yield touched 2.871 percent, its lowest since June 1.

The Canadian dollar averaged 75.32 cents USA, down 0.39 of a United States cent, as it continues to face the twin pressures of rising U.S. rates and trade fears, especially related to NAFTA. We'll look at the countermeasures China might put in place, and what this conflict means for USA businesses that operate there. In April the Commerce Department blocked ZTE from buying US components for seven years, a move that amounted to a death sentence for the company. Markets in China and Hong Kong were closed for a holiday.

While the strong dollar affected commodities across the board, investors in USA agricultural commodities appeared particularly anxious.

Lower-risk assets gained on the latest round of trade threats.

Japan's Nikkei lost 1.8 percent, South Korea's KOSPI retreated 1.3 percent while Australian stocks bucked the trend and added 0.1 percent helped by a depreciating currency and an overnight bounce in commodity prices.

There were still a few gainers to be found on Wall Street.

Investors sought safer investments, such as high-dividend companies like utilities and companies that make and sell household goods. The Russell is up nearly 10 percent this year while the S&P has risen 3 percent and the Dow is flat.

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