Companies await China retaliation; weaker growth expected

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Companies waited Monday to see how China will retaliate for President Donald Trump's escalation of a fight over technology and trade that threatens to disrupt a Chinese economic recovery.

Regulators threatened "necessary countermeasures" for Trump's tariff hikes Friday on $200 billion of Chinese imports. But three days later, in a break with previous tit-for-tat penalties imposed immediately, Beijing had yet to announce what it might do.

The latest talks ended Friday with no word of progress after Washington accused Beijing of trying to backtrack on earlier commitments. A stumbling block has been U.S. insistence on an enforcement mechanism with penalties to ensure Beijing carries out its commitments. Economists say Chinese leaders probably reject that as a violation of Chinese sovereignty.

Beijing matched Trump's earlier 25% tariff on $50 billion of American goods. It imposed 10% per cent charges on $60 billion of imports but left other goods unaffected, possibly out of concern for Chinese companies that depend on U.S. technology and components.

 

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