Trump defends China trade negotiations as global markets fall

Defense Secretary James Mattis welcomes Chinese Minister of National Defense Gen. Wei Fenghe to the Pentagon

U.S. and Chinese flags are seen in Arlington Virginia U.S

China said it will impose higher tariffs on $60 billion worth of American-made products on June 1 as payback for President Trump's decision last week to jack up US tariffs on Chinese goods to punish Beijing after trade talks fell apart heading into the weekend.

He added that "Many companies are leaving China so that they will be more competitive for US buyers". Then, on Monday, the Trump Administration outlined plans to impose additional tariffs on another $300 billion worth of Chinese imports, providing a list of products that include apparel, children's toys, crafting products, sports equipment and shoes.

Odds of a settlement "remain high", said Mark Zandi of Moody's Analytics in a report.

On the other hand, China's government does not change political parties, and can potentially wait a year and a half to see how the 2020 elections go in the United States, to see if they will have a different administration to negotiate with or still this administration.

Infratil shares dipped 2.99 per cent to $4.22 after the New Zealand infrastructure investment company said it was teaming with Canada's Brookfield Asset Management to buy Vodafone New Zealand from its United Kingdom parent company for $NZ3.4 billion ($3.2 billion). Hong Kong, Australia and Taiwan also fell. The annual spending of average American family of four will see a rise of 767 USA dollars on household goods if a 25 percent tariff is imposed on 250 billion US dollars in Chinese goods, reducing American employment by 934,000. China's Finance Ministry announced duties of 5% to 25% due to take effect June 1 on about 5,200 American products, including batteries, spinach and coffee. Details of what the duties were before the increases were unclear.

Trump said Monday he had not decided whether he would ultimately impose those levies. He told reporters, "I have not made that decision yet".

Trump warned Xi on Twitter that China "will be hurt very badly" if it doesn't agree to a trade deal. "You had a great deal, nearly completed & you backed out!"

The world's top two economies ended two days of negotiations in Washington on Friday with no deal.

Trump has said he would meet with Chinese President Xi Jinping next month, with focus now turning to an upcoming G20 meeting.

Analysts have said investors should prepare for a more volatile stock market while the trade dispute deepens.

"Given that equity markets are so far behind the curve in repricing the risk to the new-world reality, equities could be in for an extended period of pain", he said in a note.

Trump's advice that American customers can buy alternatives in domestic market or from non-tariffed countries is thus unrealistic in the era of global integration. Ten-year Treasury yields edged higher to 2.42 per cent. Commodities targeted by Chinese tariffs - including soybean and cotton futures - also reversed losses. The U.S. increases apply to Chinese goods shipped starting Friday, which will take about three weeks to cross the Pacific and arrive at U.S. ports.

The study, by the economic consulting firm Trade Partnership Worldwide, assesses how tariffs will affect American consumers and the economy. That has sent shockwaves through other Asian economies that supply Chinese factories. -Chinese trade balance. Regulators have started targeting American companies in China by slowing down customs clearance for shipments and issuance of business licences. The U.S. has the stronger legal stance as far as global trade agreements are concerned.

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