Concerns are rising that Asia's fourth-largest economy could be among the losers of the protracted trade war between its top two trading partners after the Donald Trump administration unveiled an additional list of tariffs on $200 billion worth of Chinese goods.
It also includes consumer goods ranging from auto tires, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.
Washington, DC, July 11, 2018-Flooring is included on a list of products imported from China that could face tariffs of 10% from the U.S. "There is no justification for such action".
Last Friday, the U.S. imposed 25 per cent tariffs on $US34 billion ($46 billion) of Chinese products, and Beijing responded by hitting the same amount of USA imports.
"While the trade conflict between the USA and China has had a limited impact so far, we can't rule out the possibility of a slowdown in the Chinese economy and a contraction in world trade should conflict grow and spread into the global market", Finance Minister Kim Dong-yeon said at a government meeting.
The Dow Jones Industrial Average fell 200 points with Caterpillar DowDuPoint and Chevron being the biggest markets to plunge.
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.
In the first round of a tit-for-tat trade war, China responded to last week's United States tariffs with import taxes of equal size on $US34 billion worth of American exports.
He said: "Chinese equities were amongst the worst performers today, with the Shanghai Composite dropping 1.8% after the US Trade Representative set out the $200bn of Chinese imports on which it intends to impose a 10% tariff".
The tariffs will not be implemented immediately but will go through a 2-month review process.
The move drew immediate condemnation from Senate Finance Chairman Orrin Hatch, a Republican from Utah, who called it "reckless" and not "targeted". They criticize Trump's tactics but share USA complaints about Beijing's industrial policies. Imposing taxes on another $200 billion worth of products will raise the costs of every-day goods for American families, farmers, ranchers, workers, and job creators.
The National Association of Manufacturers also criticized the USA decision, saying this latest round of tariffs could undermine the economic gains from the administration's tax and regulatory reform policies.
While Korean-made autos are exempt from United States duties under the bilateral trade pact implemented in 2012, market watchers say new tariffs of 25 percent could deal a heavy blow to local manufacturers and parts makers.
They also said they remain open to working with China to try to resolve the dispute, but the response from Beijing so far has been unsatisfactory.
"This latest story will serve as a reality check for the market, reminding investors to reconsider how aggressive they want to be", said Michael O'Rourke, chief market strategist at JonesTrading.
'It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating, ' it said.