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Trump lashes out at China, vows quick response

Heather Scott with Ryan McMorrow in Beijing
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"We don't need China and, frankly, would be far... better off without them," US President Donald Trump tweeted

"We don't need China and, frankly, would be far... better off without them," US President Donald Trump tweeted (AFP Photo/MANDEL NGAN)

US President Donald Trump lashed out at Beijing on Friday, vowing a quick response to China's announcement of new tariffs and ordering American companies to leave the country.

The blistering Twitter screed called into doubt chances for a quick resolution to the escalating trade war between the world's economic superpowers, which by the end of the year will cover nearly all imports and exports exchanged between the two countries.

"We don't need China and, frankly, would be far... better off without them," Trump tweeted.

The attack came with Trump expected to ruffle feathers in France at the weekend meeting of leaders of the G7 nations, with tensions mounting between Trump and the Europeans, Canada and Japan over trade tariffs.

The friction has already slowed US growth and undercut the global economy, and the threat of a deterioration sent stock markets falling sharply.

The Dow lost more than 600 points from its peak, to close with a loss of 2.4 percent. The German DAX lost more than one percent but London's FTSE gained ground.

China announced Friday it would hit US soybeans, lobsters, peanut butter and other imports worth $75 billion with new tariffs in retaliation for Washington's latest round of punitive duties that take effect in two rounds, September 1 and December 15.

"I will be responding to China's Tariffs this afternoon. This is a GREAT opportunity for the United States," he tweeted.

There was no word from the White House when his announcement might be coming.

- Ordered to move -

"Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won't let that happen!," Trump tweeted.

"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing... your companies HOME and making your products in the USA."

It is unclear under what authority Trump could demand private companies alter their production.

But the influential US Chamber of Commerce urged the two sides to return to the negotiating table to find a solution.

"While we share the president's frustration, we believe that continued, constructive engagement is the right way forward," Myron Brilliant, the business group's head of international affairs, said in a statement.

"Time is of the essence. We do not want to see a further deterioration of US-China relations."

And the National Retail Federation said it was "unrealistic" to expect American retailers to move out of the world's second largest economy.

China's punitive tariffs of five to 10 percent will apply to 5,078 US items, and are timed to start in tandem with the new US duties September 1 and December 15, China's state council tariff office said.

Beijing also announced it would reimpose a 25 percent tariff on US autos and a five percent tariff on auto parts, also starting December 15. China had lifted those tariffs earlier this year as a goodwill measure while trade talks were underway.

Trump already imposed steep tariffs on $250 billion in Chinese goods, with a further $300 billion in imports targeted in the coming rounds.

Beijing has hit back with duties on around $110 billion of US goods -- or nearly all of the $120 billion worth of American goods it imported last year.

Some of those goods will now have their tariff rates raised even further.

China's commerce ministry said it will hit American frozen lobster, frozen chicken feet, peanut butter and 914 other goods with new 10 percent punitive tariffs starting September 1.

Soybeans, crude oil and other energy goods face 5 percent tariffs.

The US actions "have led to the continuous escalation of China-US economic and trade frictions, violating the consensus reached by the two heads of state in Argentina and the consensus reached in Osaka," China's State Council Tariff Commission Office said in a statement.

"China's adoption of punitive tariff measures is forced under the pressure of US unilateralism and trade protectionism," the office said.

US-made mango juice, electric buses and chemical products face 10 percent duties come mid-December while smaller aircraft, hand pumps and bearings will be hit with 5 percent taxes.

- No rulebook -

Federal Reserve Chair Jerome Powell warned in a speech Friday that trade tensions were exacerbating the global slowdown and the central bank does not have a "rulebook" for dealing with the fallout.

But he also vowed to "act as appropriate" to sustain the sustain the US economy.

An alarm bell went off in the US Treasury bond market last week when 10-year bond yields briefly fell below the yields offered on a two-year bond -- seen as a sign of looming recession -- and it happened again Friday.

US officials have said in recent days that trade talks with China would continue face-to-face talks next month.

However China's commerce ministry spokesman Gao Feng said Thursday he had no information on the next round of meetings, while noting the two sides remain in contact.

The two economic giants are squaring off in an increasing number of areas with officials and spokespeople taking daily shots at each other over trade, territorial disputes in the South China Sea, protests in Hong Kong and US actions against Chinese tech giant Huawei.