(Bloomberg) -- President Donald Trump warned China against “substantial” retaliation for new U.S. tariffs after his escalating trade war with Beijing rocked global financial markets.
“There can be some retaliation but it can't be very substantial,” Trump told reporters on Monday during a meeting with Hungarian Prime Minister Viktor Orban.
China on Monday announced plans to raise duties on some American imports starting June 1, defying Trump's warning to resist escalating the trade war. Beijing's move sent stocks tumbling and clouded the outlook for the global economy.
Trump predicted China would attempt to target U.S. farmers, a mainstay of the president's political support. Farmers “will make the same kind of money” even if they face retaliation, he said.
The two nations reached a stalemate Friday in trade talks that the White House had expected to conclude this month with a deal.
China's move to hike tariffs came in response to the U.S.'s decision last week to increase levies on $200 billion in Chinese imports to 25% from 10%. Trump on Monday accused China of backing out of a tentative deal, saying Beijing reneged on an agreement to enshrine a wide range of reforms in Chinese law.
U.S. stocks and commodities tumbled after China's retaliation. More than 450 stocks in the the S&P 500 fell and the Dow Jones Industrial Average slumped over 600 points after China targeted some of the nation's biggest exporters.
--With assistance from Jennifer Jacobs.
To contact the reporter on this story: Margaret Talev in Washington at mtalev@bloomberg.net
To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Joshua Gallu
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