China warned on Friday it was fully prepared to respond with a "fierce counter strike" of fresh trade measures if the United States follows through on President Donald Trump's threat to slap tariffs on an additional $100 billion of Chinese goods.
Pledges on autos and IP were accompanied by a promise to push through reforms in the financial services industry, which would open up to more foreign participation - reforms first announced past year.
"We will take the initiative to expand imports", Xi said in a keynote speech at the opening ceremony of the Boao Forum for Asia annual conference held in the southern island province of Hainan.
When stocks were getting bombarded with bad news on trade, tech privacy lapses and interest rate fears, Wall Street was holding out hope the USA market could defend a key line of defense that had been in place for 442 trading days.
The tit-for-tat tariffs between the world's two largest economies follows a US finding that China was engaging in unfair trade practices in connection with intellectual property protections.
No direct reference was made on the threat of a trade war between the United States and China during Xi's speech, but he said that "a Cold War mentality, zero-sum thinking and isolationalism" are out of place.
"What we need China to do at this junction is not to open up whole new sectors but just to allow USA companies to own their companies", he said.
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The United States is not expected to apply its tariffs at least until June, according US Trade Representative Robert Lighthizer, White House chief economic adviser Larry Kudlow and other senior officials. Meanwhile, as Shepp notes, China could "go for the "nuclear option' of dumping its sizable hoard of U.S. Treasury bills and messing with the U.S. bond market, thereby causing a spike in interest rates".
The back-and-forth has prompted concerns that Trump will spark a global trade war and hurt American workers, particularly farmers who export their crops to China.
The trade standoff between the USA and #China is escalating.
In a tweet on Monday morning Trump says that when a Chinese-made vehicle is sent to the USA, the tariff is only 2.5 percent, while American cars exported to China are slapped with a 25 percent tariff.
At the heart of complaints by the Trump administration, as well as among some officials in Europe, are policies they say are at odds with Beijing's earlier era of market liberalization.
Xi's choice of vehicles as a specific product class was telling as a message to Trump; the US president used precisely the example of Chinese tariffs on cars in voicing his grievances about Chinese trade practices.
But he also downplayed the tariff threat as "part of the process", suggesting on CNN that the impact would be "benign" and said he was hopeful that China would enter negotiations.
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The meat sector should benefit mainly from pork exports, in view of the fact that the Chinese market already had restrictions for poultry and cattle. That was a fraction of the number of cars the US exported to China: 267,000 passenger vehicles worth $9.9 billion. Even with the USA tariffs, China can still reach its 2018 GDP growth target of around 6.5 percent and the impact on employment will be limited, Wang Changlin, a researcher at the National Development and Reform Commission (NDRC), wrote in a post on the commission´s official microblog account.
The speech - marking 40 years after the first economic reforms transformed China - was being closely watched after Trump's plan to hit hundreds of Chinese products with duties.
On the contrary, rising trade war could actually help in moderating the crude oil prices, which have gone up by over 140% from the 2016-lows due to cartelisation of oil supply by the Opec and also recent recovery in the global growth.
Beijing, which has issued a $3 billion list of US goods including pork and apples for possible retaliation, requested 60 days of consultations as a first step.
"The punches keep getting thrown, but the market has managed to hang in there", said Chris Verrone, a strategist at Strategas Research Partners.
China is threatening the tariffs in response to Trump moving to enact protectionist measures as punishment for Chinese theft of US intellectual property.
The trade showdown between Washington and Beijing has rattled investors and fueled market fears that the dispute could soon spiral into a full-blown trade war.
India, Nepal vow to strengthen bilateral ties
They appreciated the progress made in the implementation of Phase-I of the India-Nepal cross-border rail link projects. No other countries in the world have the bonds of friendship and cooperation that exist between India and Nepal.
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