United States authorities are considering increasing pressure on China in the trade war as retaliatory action in response to China's limitations on U.S. tech companies.
The Trump administration has recently threatened up to $150 billion worth of import duties on Chinese products ranging from steel to robotics, while China has responded with its own list of US products that would be subject to higher tariffs - including soybeans, aircraft and automobiles.
The US Treasury at the end of March said that they were not afraid of going into a trade war with China. "If the tensions continue, China's trade competitiveness may be undermined, weighing on GDP growth", Liu added. The S&P 500 index rose 0.1 percent to 2,708.64.
Growth has remained comfortably above the government's target of around 6.5 percent for the full year, giving policymakers room to further reduce risks in China's financial system and rein in pollution without stalling economic growth.More news: Arizona politicians react to former first lady Barbara Bush's passing
China's Commerce Ministry says it will force US sorghum exporters to pay a temporary 178.6 percent "deposit", which will act as a tariff on the cereal grain that is used in China as feed for cattle and as a sweetener in many products, including baijiu, a popular Chinese liquor. "It is not seasonal - if you look at growth in cosmetics, spending on clothing, spending on automobiles, there has been a persistent trend for a few months", said Iris Pang, Greater China economist at ING in Hong Kong.
For the past decade, about 20pc of China's exports have been ferried to the United States, according to Moody's Investors Services, which forecasts a material macroeconomic impact if Trump makes good on his threats with the consequences vibrating beyond China's end exporters and deep into the economy.
But China's commerce ministry later reiterated that no negotiations were underway between the two capitals as Washington had not shown enough "sincerity".
"Even in the worst scenario that both countries start to implement the $50 billion tariffs, we're talking about a few tenths of a percentage point and most likely it will only start to affect the economy late this year and in 2019". Analysts had predicted output growth would cool to 6.2 percent from 7.2 percent in the first two months of the year.More news: Reviews on Brand New Atmosphere base bombings a Fictitious Alert
China's trade balance swung to a rare deficit in March as exports shrank 2.7 per cent over a year earlier.
The United States has argued that the proposed tariffs on goods like electronics and machinery have not been levied yet, so China's request wasn't justified under WTO dispute settlement rules.
The overall economic policy has become less favourable for economic growth.More news: Trump morally unfit to be President: James Comey
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