"In addition to soybeans, China threatened to retaliate with tariffs on American cars, chemicals and other products", The New York Times reported Thursday.
Investors were unnerved by President Donald Trump's threats of tariffs on an additional $100 billion in Chinese imports as the USA president hit out at China's "unfair retaliation" to a prior Trump announcement of $50 billion in tariffs on Chinese goods.
Speaking on CNBC, Mnuchin said Trump is not aiming to provoke a conflict with China, but he is determined to defend United States interests and "there is the potential of a trade war". The next day, China fired back, matching Trump dollar-for-dollar with a plan to impose import duties on $50 billion worth of American products.
The moves follow United States tariffs that were imposed earlier this year on Chinese steel and aluminum, which also prompted retaliatory measures from China. China bought $130 billion worth of USA goods in 2017, making it the third-largest market for our exports, behind only Canada and Mexico.
On Tuesday, President Trump announced another $50 billion in tariffs against Chinese products, which the Chinese matched that night with $50 billion in tariffs against USA products, including automobiles, airplanes, whiskey and a slew of agricultural products including beef, pork, corn, sorghum, cotton and soybeans. But with the domestic political credibility of the leaders of both countries now on the line, just as in a real war, the scope for a mutually face-saving climb-down has narrowed. "If the United States announces an additional $100 billion list of tariffs, China has already fully prepared, and will not hesitate to immediately make a fierce counter strike".
"I'm not saying there's not going to be any pain", he told WABC radio in NY, but "we're going to be much stronger for it". "We're not going to do this and lay out out our negotiations in the public domain", Mnuchin said.
Corporate executives, who only weeks ago thought they had successfully contained Trump's impulses on immigration and trade, are now unsure what is coming next or what it will do to the economy. The issue has been extensively discussed by officials, including the president and foreign minister, as well as in opinion commentaries ("China voice: Ten reasons China, U.S. can avoid Thucydides Trap", Xinhua, 2017).
Kudlow, who has repeatedly sought to soothe markets with mention of possible talks, told Bloomberg Television there were always ongoing bilateral discussions on trade but that negotiations on tariffs had not begun.
Kudlow and Mnuchin both said they don't want a trade war and that there will be at least two months for both countries to back down, but the threat of tariffs they said, is very real and not a bluff.
USA exports to China are equivalent to less than 5% of the output of the agricultural and other primary products industry.
"This is what a trade war looks like, and what we have warned against from the start", said National Retail Federation President and CEO Matthew Shay.
Some analysts have speculated the two countries could reach a detente before new tariffs take effect.
The International Monetary Fund also expressed concern, saying the proposed tariffs would likely damage the U.S. economy and those of other nations. The United States hasn't said when the initial set of charges on $50 billion of goods will come into force.