The latest plunge comes as China announced Monday its intentions to increase tariffs on some $60 billion worth of US goods, most of them agricultural products. The retaliatory measures are set to take effect on June 1. Beijing alluded to the new measures Friday, as it expressed deep regret at the US' latest chess move.
"With the ultimate trade outcome inherently uncertain and difficult to model or predict, investors are selling first and asking questions later," Alec Young, managing director of Global Markets Research at FTSE Russell, told Reuters.
The US and China have been engaged a trade dispute since June 2018, when the Trump administration opted to impose a 25% tariff on an estimated $50 billion worth of Chinese goods. China's Monday measure came as a response to the adminstration's move last week to increase existing import tariffs on $200 billion worth of Chinese goods from 10% to 25%.
Steve Keen, author of "Debunking Economics," told Sputnik on Friday that the US current path is unlikely to bring it to balanced trade with China. "It ain't gonna happen," he said.
Following the tariff increase, it was also revealed on Friday that US President Donald Trump ordered US Trade Representative Robert Lighthizer to raise tariffs on all remaining US imports from China, which amount to another $300 billion. Officials from Washington and Beijing are expected to resume trade talks this week in Beijing.