Investor confidence started to return early this week amid a momentary lull in the trade war, following Beijing's retaliation tariffs on USA imports last week after Trump hit China with a 25 per cent tariff worth $34bn on imports.
"The President has broken his promise to bring 'maximum pain on China, minimum pain on consumers, ' and American families are the ones being punished", Hun Quach, RILA VP of global trade, said in a statement. Until January 2017, Ivanka's products were made in factories based in China and Hong Kong; around the time of Trump's inauguration, they appeared to make a well-timed exit and moved to other foreign factories, such as those in Indonesia, Vietnam, and South Korea. It's unclear what that action could include.
US Trade Representative Robert Lighthizer said the United States would impose tariffs of 10 per cent on the additional Chinese imports. The moves followed an initial raft of 25 percent tariffs announced Friday by the USA on $34 billion in Chinese exports, which was reciprocated by China.
Analysts say the Chinese government could target trade in services between the two countries, such as tourism and education, or seek to make life hard for big American companies operating in China.
China imported USA goods worth $130 billion past year and Friday's tariff hike hit $34 billion of that, with another $16 billion cited for a possible increase. In late morning trading, all major European indices are also nursing losses of more than 1%.
"Rather than address our legitimate concerns, China has begun to retaliate against U.S. products", Lighthizer said in a statement.
Members of Congress are increasingly questioning Trump's aggressive trade policies, warning that tariffs on imports raise prices for consumers and expose US farmers and manufacturers to retaliation overseas. Trump has said he may ultimately target more than $500 billion worth of Chinese goods - roughly the total amount of US imports from China previous year.
The $200 billion far exceeds the total value of goods China imports from the United States, which means Beijing may need to think of creative ways to respond to such USA measures.
China formally responded to the latest U.S. move on Wednesday, with a Chinese Ministry of Commerce spokesperson calling it "unacceptable".
The tariffs will not be imposed until after a two-month period of public comment on the proposed list, but some United States business groups and senior lawmakers were quick to criticize the move.
"Unfortunately, China has not changed its behavior - behavior that puts the future of the US economy at risk", he continues.
The latest escalation in the trade dispute sent markets lower.
And added, "China's export sector will, therefore, suffer a significant deterioration in export competitiveness to the U.S. compared to other emerging markets' manufacturing exporters, such as Vietnam, South Korea, Thailand, Bangladesh, Mexico, and Brazil,".
"China seems to have no interest in bending and they will retaliate".
US Senate Finance Committe chairman Orrin Hatch labelled the move as "reckless", while the US retail industry leaders assocation immediately condemned the move, saying the "the President has broken his promise".