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AFP
US stock markets have been down since a second day following Donald Trump's decision to impose new tariffs on an additional $ 300 billion of Chinese imports.
The three major US indices all ended the week lower, following sharp declines in Europe and Asia.
The decision of the US president was taken after the latest round of bilateral talks showed little sign of a breakthrough.
The 10% tariff, which will come into effect on September 1, actually taxes all Chinese imports into the United States.
Rates are likely to target a wide range of products, from smartphones to clothing.
A spokeswoman for the Chinese Foreign Ministry warned the country of retaliation against the United States for imposing rights.
"If the United States applies tariff measures, China will have to take the necessary countermeasures to resolutely defend the fundamental interests of the country and its people."
She declined to say what this might imply, but earlier this year, China said it could curb exports of rare earth minerals to the United States.
China is the largest producer of rare earths, essential for a number of US industries such as electric car manufacturing and wind turbine production.
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US stock markets have fallen since Donald Trump announced new tariffs on imports from China
Trump announced Thursday the tariff plan on Twitter, while targeting China for not keeping its promises to buy more US agricultural products during this week's talks in Shanghai.
He also attacked Chinese President Xi Jinping for not doing more to curb synthetic opioid sales, fentanyl.
In later remarks, the US president told reporters that the 10% tariffs were a short-term measure and could be raised in stages to more than 25%.
That would add to the $ 250 billion of Chinese products that are already taxed at 25% by the Trump administration.
Oxford Economics said: "We hope this step will make China less inclined to reach an agreement and more determined to prepare for long-term economic tensions with the United States."
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What has been the answer so far?
This decision surprised the markets, as Washington and Beijing had called this week's trade talks constructive and scheduled a new round of negotiations in September.
The US Chamber of Commerce, which represents more than three million US companies, said the latest tariffs applied to China "would only exacerbate the consequences for businesses, farmers, workers and workers. US consumers and would undermine the strength of the US economy. "
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He urged both parties to remove all tariffs.
The latest set of tasks comes as more and more fears that Mr. Trump's strategy is bearing fruit.
On Thursday, his former chief economic advisor, Gary Cohn, told the BBC that the tariff battle had a "dramatic impact" on manufacturing and capital investment in the United States.
The resulting tensions also influenced the US central bank, the Federal Reserve, which lowered interest rates on Wednesday for the first time in a decade.
Fed Chairman Jerome Powell said it was not up to the central bank to criticize US trade policy, but added that trade tensions had "almost erupted" between May and May. and June.
How did the markets react?
In the United States, the Nasdaq index was the biggest loser Friday, down 1.3%. The technology companies listed in the index are considered particularly vulnerable to tariffs on Chinese products because many components from China or who produce their products there.
US indices had already fallen sharply Thursday when Trump announced the surprise, but the Dow Jones Industrial Average and the S & P 500 closed respective decreases of 0.37% and 0.73% respectively.
In Europe, the British FTSE 100 index ended down 2.3%, the German Dax index lost 2.9% and the CAC 40 in France lost 3.3% at the close of the markets. Earlier in Asia, Japan's Nikkei index had dropped more than 2%.
Mr. Trump said his business tactics worked well and that Beijing felt the pain. But China is not the only country that suffers. The International Monetary Fund has warned that the trade war between the United States and China poses the greatest risk to the global economy.
More and more evidence is showing that the US economy is also affected. Data released last week showed that the US economy had made less progress than expected last year.
The figures show that foreign trade and business investment declined over the course of the trade war.
US companies are delaying their expansion plans and investments, which means that new plants are not built and new jobs are not created.
All of this makes investors more and more nervous, and there are fears now that trade wars are unfolding on many fronts, with a new conflict between Japan and South Korea.
How did we come here?
China and the United States have been engaged in a dispute over trade since the early days of Mr. Trump's presidency.
While he was campaigning for the 2016 presidential election, Mr. Trump has repeatedly accused China of unfair commercial practices and theft of intellectual property.
He also wants to reduce the US trade deficit with China, which he says is hurting the US manufacturing sector.
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In the past year, both parties have imposed tariffs on billions of dollars worth of goods.
Despite several rounds of negotiations, the world's two largest economies have failed to reach an agreement ending the trade war that has shaken investors and cast a shadow over the global economy.
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