Global markets: Stocks, commodities consolidate after latest trade war jolt

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China only imported $130 billion worth of goods from the United States previous year - which is down nearly a third of the value of United States' imports from China.

A Commerce Ministry statement said, "It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating". It said Beijing would take unspecified "necessary countermeasures" to protect its "core interests".

S&P 500 and Dow futures dropped around one per cent, pointing to a weak opening on Wall Street later on Wednesday.

The list of new tariff targets from the US Trade Representative includes vacuum cleaners, furniture, and vehicle and bicycle parts, but US-branded smartphones and laptops were excluded. "As in the past, the United States is willing to engage in efforts that could lead to a resolution of our concerns about China's unfair trade practices and to China opening its market to USA goods and services", Lighthizer said in the statement.

President Donald Trump vowed to hit back on a growing list of products after China retaliated in kind for the first round of 25 per cent tariffs on $34 billion worth of imports that Washington imposed last week.

The Trump administration has planned more tariff increases in case of continued Chinese retaliation that could ultimately cover the entire worth of imports from China, $505 billion. Many market watchers are concerned the trade war will derail the expansion.

Hong Kong's main index shed 1.3 percent. It left untouched US -branded smartphones and laptop computers.

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The onshore yuan tracked its offshore counterpart lower with traders closely watching the key 6.7 per dollar level as pressure mounted on the currency.

"We can not turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy". But it also points out that American cars assembled in China will equally bear the brunt of the tariff war.

"In part because they have only limited ammunition and in part because it's still early in the process on the US side", Kuijs said.

China's exports have mushroomed since it joined the World Trade Organization in 2001, making it the world's second-largest economy and prompting widening criticism in recent years from trading partners that it has unfairly used global trade rules to its advantage.

"The outburst of large-scale mutual levying of tariffs between China and the United States will inevitably destroy Sino-US trade", he told the forum. "It has become a pattern of reacting to each new development and hoping that trade strains ease in the next few months through negotiations", said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

On Monday, Chinese and German companies including BASF and Volkswagen signed business deals worth 20 billion euros ($23.6 billion) during a visit to Berlin by China's No. 2 leader, Premier Li Keqiang.

Tariff hikes are "hitting immediately the bottom line" of companies that rely on the free flow of trade across countries, said Mats Harborn, president of the European Union Chamber of Commerce in China.

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