United States stocks dip as Trump talks of more tariffs on China

"They would make a big effort to say what they are doing is not motivated by that", he added.

The Chinese yuan fell to its weakest level against the USA dollar in a year on Thursday.

Beijing, meanwhile, has accused the United States of starting the "largest trade war in economic history" and has vowed to retaliate dollar-for-dollar.

US President Donald Trump has stoked fears of a currency war, on top of a trade war that has already sent jitters across markets.

But Trump's comments did not do much to push the dollar down versus the yuan, however.

In a taped interview with the business channel CNBC, Trump warning, "I'm willing to go to 500", meaning he's prepared ultimately to impose tariffs on $500 billion in Chinese imports - roughly the value of all the goods Beijing shipped to the United States past year.

A second tranche of US$16 billion (RM65 billion) in products is under review and could soon be added to the United States measures.

"We're down a tremendous amount", Mr Trump said in an interview about trade imbalances with China on CNBC. The administration has also released a list of 10-per-cent tariffs on an additional US$200 billion of Chinese goods, which could take effect as early as next month.

The administration says it wants China to end the theft of intellectual property from US companies and curb policies that require American and other foreign businesses to hand over technology in exchange for access to the Chinese market.

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"I'm not thrilled", he said. However, such a maneuver risks reigniting an outflow of capital that Beijing has spent months trying to halt.

Unlike the dollar or euro, the yuan does not float freely against other currencies.

Over the past three years, Beijing has gradually widened the narrow band in which the yuan is allowed to fluctuate, though regulators intervene regularly to guide its movement. It points out the potential consequences trade escalations could have on American soybean exports, underscoring that China is the world's largest soy importer.

"The escalating trade war, if it goes badly, could be a risk for the US economy", Bullard said, adding he understands the policy's objective. Earlier this year, he invoked national security as a justification for taxing imported steel and aluminum.

Several U.S. companies are putting in place measures to cushion the impact of escalating trade tensions between the United States and China.

"There's no negotiating going on that I can see", Dollar said.

He said: "China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge".

The dollar began taking a hit on Thursday after Trump suggested that the Fed's policy of raising USA interest rates was pushing up the dollar, in turn hurting American exporters.

A top Federal Reserve official, meanwhile, warned the trade war could hurt the U.S. economy. "Because we go up, and every time you go up, they want to raise rates again". Past presidents have typically refrained from criticizing the Fed, which determines how to manage interest rates to keep inflation in check.

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