President Donald Trump said on Thursday he had instructed US trade officials to consider $100 billion in additional tariffs on China, fuelling an already heated trade dispute between the world's two biggest economies.
Trump said in a statement the further tariffs were being considered "in light of China's unfair retaliation" against earlier US trade actions that included $50 billion of tariffs on Chinese goods.
He added that the US Trade Representative had determined that China "has repeatedly engaged in practices to unfairly obtain America's intellectual property."
Trump's after-market-hours comments spurred a sharp sell-off in US equity futures markets. The S&P 500 e-mini futures traded down 1.3 per cent , while similar moves were reflected in Dow and Nasdaq futures . In currency markets, the US dollar fell against the Japanese yen, down 0.30 per cent to 107.06 yen.
Earlier this week, the Trump administration proposed 25 per cent tariffs on some 1,300 Chinese industrial and other products. China shot back with a list of similar duties on American imports including soybeans, planes, cars, beef and chemicals.
"Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers," Trump said.
The tit-for-tat tariffs have stirred fears that the two countries will spiral into a trade war that will crush global growth. Republican lawmakers from Western and Midwestern states have voiced worries about a big hit to US farming exporters.
White House officials have suggested throughout the week that talks with the Chinese could help resolve trade issues between the two countries. China ran a $375 billion goods trade surplus with the United States in 2017. Trump has demanded that the China cut the trade gap by $100 billion.
A senior US official who requested anonymity told Reuters no formal negotiating sessions had yet been set but that the United States was willing to negotiate with China.
The US tariffs are aimed at forcing changes to Chinese government policies designed to transfer US intellectual property to Chinese companies.
The USTR's "Section 301" investigation authorizing the tariffs alleges China has systematically sought to misappropriate US intellectual property through joint venture requirements that often cannot be negotiated without technology transfers, something China denies.
A USTR spokeswoman did not immediately respond to a request for more information about which products would be targeted or the selection method and timing of the additional tariffs.
Financial markets have swung wildly over the past few days in response to fears of escalating trade tensions between Washington and Beijing.
Dan Ivascyn, group chief investment officer at Pacific Investment Management Co, said recent trade actions and rhetoric were an example of how "battles can turn to wars. This is another reason investors should be reducing risk."