Washington/Beijing: US President Trump escalated his trade war with China by announcing that he would impose a fresh 10 per cent tariff on another $300 billion of Chinese goods that will take effect September 1, prompting a swift rebuke from Beijing and jolting global financial markets.
The development comes after the latest round of talks led by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin with Chinese delegation headed by Vice Premier Liu He in Shanghai showed little sign of a breakthrough.
The duty is likely to target a wide range of goods, from smartphones to clothing. The move jolted financial markets. On Wall Street, the Dow Jones share index closed down 1.1 per cent, and Asia markets were sharply lower on Friday. Oil prices also tumbled, media reports said.
"Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal. We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing," Trump tweeted on Thursday.
He took aim at China for not honouring promises to buy more US agricultural products at this week's negotiations. He also attacked Chinese President Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl.
"Trade talks are continuing, and during the talks the US will start, on September 1, putting a small additional tariff of 10 per cent on the remaining $300 billion of goods and products coming from China into our country. This does not include the $250 billion already tariffed at 25 per cent."
Trump also said that tariffs could be lifted further in stages to more than 25 per cent.
Reacting to the move, China's Foreign Minister Wang Yi said that the decision won't solve the ongoing trade spat between the two of the world's largest economies.
"Adding tariffs is definitely not a constructive way to resolve economic and trade frictions, it's not the correct way," Wang said on the sidelines of an Association of Southeast Asian Nations (ASEAN) meeting in the Thai capital, according to Efe news.
China's Commerce Ministry spokesperson said that Trump's proposal "seriously violated the consensus" reached with Xi at the G20 in Osaka and "was not conducive to solving the problem".
"If the US implements the tariff, China will have to take necessary countermeasures to resolutely defend the core interests of the country... All the consequences will be borne by the US," the spokesperson added.
The Commerce Ministry said the move would have "a chilling effect" on the world economy.
European stocks joined the global sell-off sparked by Trump's decision. Germany's DAX and France's CAC 40 both dropped 2.2 per cent at the open. London's FTSE 100 was down by 1.5 per cent.
The pain was spread across sectors. Shares in carmakers, consumer goods companies and banks posted losses in line with the broader market.
The US Chamber of Commerce, which represents over three million US companies, said the latest tariffs on China "will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong US economy". It urged the two sides to remove all tariffs.
Over the past year, China and the US have imposed tariffs on billions of dollars of one another's goods.
In May, Trump increased from 10 per cent to 25 per cent a tariff on Chinese imports worth $200 billion. China retaliated by slapping tariffs on US imports worth $60 billion.
Trump later threatened to impose tariffs of up to 25 per cent on another $325 billion of Chinese imports, causing concern in financial markets and the business community.