nald Trump has threatened to raise the stakes again in a rapidly escalating trade dispute between the US and China. On Monday, Trump threatened to impose his largest tariffs yet worth 200 billion dollars of Chinese goods. He's calling the move retaliation. Last week, Trump signed off on 50 billion dollars worth of tariffs aimed at Chinese goods and Beijing decided to raise the same amount.
On Tuesday, Trump's new threats sent Asian markets sinking, stocks in Shanghai hit a two year low. The selloff extended to Europe, Germany's DAX index suffered the worst fall so far, down 1.7%. It's home to top automakers Trump has targeted in his trade rhetoric. And officials in China lashed out as Reuters Tony Monroe explains from Beijing.
>> This latest round of tariff threats from President Trump really took people by surprise both in terms of the timing and the scale of it. Tariffs on $200 billion worth of Chinese imports, China's response was quite swift and sharp. It accused the US of blackmail, of starting a trade war and it vowed to retaliate.
>> What China said, it was preparing a response, analysts say there is a limit to how far China can go.>> China only imports about $130 billion worth of goods from the United States. So it could impose punitive duties on everything it imports from the US and still not be able to match the action that President Trump is threatening here, so China would have to find other ways to retaliate.
There are plenty of things it could do. It could make life more difficult for US businesses operating here in China. It could slow things down at ports. It could step up inspections at ports, it could step up fire inspections at US factories.>> Some of Trump's $50 billion tariffs, that's the list from Friday, are set to be activated on July 6.