What Trump's trade war with China means for American consumers

China hikes tariffs on most U.S. goods in $60 billion target list

The Dow Jones Industrial Average fell by more than 700 points shortly after 1 p.m. ET Monday, with the Nasdaq composite falling by about 3.5%.

Asian shares opened weaker but closed off the lows, thanks to the more upbeat official tone. Trump remained confident about the USA economy's overall strength, saying "I love the position we're in". "As is often the case, however, the losers will not be the negotiators or presidents, but the people".

In a previous round of tit-for-tat moves, the U.S. imposed 10 percent tariffs on $200 billion of Chinese imports in September. He accused China of "ripping off" America.

Trump imposed tariffs on steel and aluminum imports from a range of countries, including Canada and Mexico. "Yes, I don't disagree with that", Kudlow said. "The United States' economy is in a boom", he said.

"Make your product at home in the U.S. and there is no Tariff".

Still, the two countries have given themselves something of an escape hatch: The higher Chinese tariffs don't kick in for 2½ weeks.

On Friday, a late-day rally spurred by upbeat comments by US officials pulled markets higher after an early slump triggered by the escalation in the trade war. For consumers, the cost of products will go up at first, but trade expert Alan Tonelson points out that factories, since the initial round of tariffs previous year, have been moving out of China to avoid what then looked like a prolonged trade standoff.

This marked a continuation of assurances Trump tried to give Monday night, when he told a group gathered at the White House that he would know in three or four weeks whether a deal could be reached. But nothing has been scheduled.

The retaliation measure came three days after the United States moved to increase tariffs on US$200 billion worth of Chinese goods from 10% to 25% as of May 10.

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"U.S. consumers, farmers, businesses and so on have become the victims of the trade frictions provoked by the United States".

"In fact, both sides will pay".

The U.S. and China had been making progress toward a final trade deal but the tentative agreement all but fell apart last week after the Chinese sought to make revisions to the deal, the White House said. What that means for soybean growers is that we're losing. The administration a year ago handed farmers aid worth $11 billion to offset losses from trade conflicts. "China trade negotiations and concern that it's really deteriorating pretty significantly and that's impacting all areas of markets", said Kristina Hooper, chief global market strategist at Invesco in NY.

The president's allies in Congress scrambled to limit the damage to farm country. For example, let's say there is a 25 percent tariff on washing machines imported from China. "You can't move these goalposts like they're moving them and expect to be respected". China's yuan and the Australian dollar also regained some poise, with the former breaking a six-day losing streak. "Our results imply that the tariff revenue the U.S.is now collecting is insufficient to compensate the losses being born by the consumers of imports", the study found. The index is coming off its worst week since January, though it's still up sharply for the year.

In another sign trade tensions are hurting the economic outlook, Germany's ZEW institute said investors' mood had deteriorated unexpectedly in May.

FILE - In this March 24, 2019 photo passers-by walk near an art installation, center, in Boston's Seaport district.

"The most important thing is that in the China-US trade war, the US side fights for greed and arrogance ... and morale will break at any point", the Global Times wrote in an editorial carried by Xinhua News Agency, according to Business Insider. That would pull annual growth below 6%, raising the risk of politically unsafe job losses. There was also an additional cost of $12.3 billion to domestic consumers and importers transferred to the government in the form of tariff revenue.

"There is nothing to be afraid of", said the party newspaper People's Daily. "It is no big deal". President Trump has pledged to broaden tariffs even further to all Chinese imports - including big-ticket items.

A stumbling block has been US insistence on an enforcement mechanism with penalties to ensure Beijing carries out its commitments.

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