U.S. plans more China tariffs if Trump-Xi meeting fails

The report cited unnamed sources who said the tariffs could cover imports from China that have not already been hit by tariffs, amounting to up to $257 billion worth of imports.

On September 24, Trump's fresh tariffs on $200 billion worth of Chinese goods and services entered force, with Washington warning that it could slap similar tariffs on another $267 billion of Chinese goods and services in the future.

According to the report, no decisions had been made but preparations for a new list of US tariffs were being made in case the Trump-Xi meeting does not yield progress in resolving the US-China disputes.

Trump said during an interview with Fox News late on Monday that he thought there could be an agreement with China on trade.

US Treasury Secretary Steven Mnuchin told Reuters earlier this month in Bali, Indonesia that China needed to agree to specific "action items" to re-balance the US-China economic relationship, opening markets and changing technology transfer, subsidy and currency policies.

The Nasdaq composite, which is heavily weighted with technology stocks, lost 116.92 points, or 1.6 percent, to 7,050.29.

News of the possible tariffs sent Boeing stock tumbling 6.6 percent, contributing to the Dow's overall losses.

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The Russell 2000 index of smaller-company stocks slipped 6.51 points, or 0.4 percent, to 1,447.31. The S&P 500 index swung by almost 4 percent from its high to the low in the trading session, with tech stocks and Boeing particularly hard hit. The trade war started with Trump's steel and aluminum tariffs, quickly escalating to include tariffs on USA farm products, most notably soybeans and pork. Figures from the previous year, the most recent data available, showed 44 per cent of Chinese respondents held unfavourable views of the US.

If president Trump's response is to intensify his trade war with the China, he will set up a vicious downward cycle, and where that will end should worry people. Trade-sensitive industrial shares rose almost 1.2 per cent in mid-morning trading.

Brazil's Bovespa rose in morning trading after far-right politician Jair Bolsonaro was elected president, but it later turned lower and lost 2.2 percent.

The pan-European STOXX 600 index rose 0.01 percent.

The price of US crude oil dropped 0.8 percent to $67.04 per barrel in NY while Brent crude, used to price worldwide oils, lost 0.4 percent to $77.34 per barrel in London. Most of those imports are now being charged a 10 percent tariff, which is set to increase to 25 percent at the end of the year.

Gold fell 0.1 percent to $1,231.51 an ounce, the biggest fall in a week.

  • Darren Santiago