U.S. President Donald Trump on Wednesday said his tough stand on China’s economic and trade policies would ultimately benefit the American economy.
On his comment, Beijing retaliated that it could strike back by restricting sales of chemicals known as rare earth that are used in everything from iPhones to military equipment.
The U.S.-China trade war increased sharply in recent days after Washington on Monday stamped Beijing a ‘currency manipulator’ for the first time since the year 1994.
U.S. also said that it would impose 10% tariffs on the remaining $300 billion in Chinese imports, starting on Sept. 1.
The moves have affected financial markets and raised concerns about a global recession.
U.S. Treasury yields fell on Wednesday with 30 years low. The Federal Reserve would have to cut interest rates further to counter rising recession risks.
Howerver, Trump said that the market reaction had been expected, but he remained confident in the strength of the U.S. economy.