President Donald Trump threatened that the trade standoff with China will “get worse” if there is retaliation for US tariffs that go into effect on Chinese goods Monday.

“I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries,” Trump wrote in one of several Twitter messages.

Trump’s comments come after high-level talks between Chinese and American officials broke up May 10 without a deal and ahead of an expected announcement Monday from US officials detailing their plans to impose a 25% additional tariff on all remaining imports from China - some $300 billion in trade.

As Beijing promised retaliatory measures, Chinese state media blamed the US for a lack of progress in trade talks while emphasising the country’s economic resilience.

People’s Daily, the flagship newspaper of China’s Communist Party, said in a front-page commentary that the US should take full responsibility for the setbacks because it went back on its word and imposed more levies on Chinese products.

“That cast a shadow on the trade talks and directly led to the fruitless outcome” of trade discussions, the paper said. The ongoing trade fight between the world’s two biggest economies is roiling markets and weighing on projections for global growth. US equity futures slumped, pointing to a big drop at the open in New York, and stocks declined across Europe and Asia Monday as investors awaited the next phase of the escalating trade war between America and China.

The yuan tumbled and Treasuries rallied. Trump’s latest China trade comments brought to at least 30 the number of tweets or retweets he’s issued about China or tariffs since May 10, the day the last round of trade talks concluded. Perhaps with an eye toward the 2020 election, the president and his aides are insisting that the renewed conflict won’t adversely affect the US economy, putting them at odds with many economists.

The White House’s top economic adviser, Larry Kudlow, predicted that the impact on US jobs and growth from higher tariffs assessed on Chinese goods would be “de minimis,” while conceding that “both sides will suffer” from the trade war.

Trump has repeatedly said that China will pay the tariffs that increased May 10 to 25% from 10% on $200 billion in Chinese goods. Kudlow undercut that in an interview on “Fox News Sunday.”

No date has been set for fresh talks, but it’s likely Trump would meet with Chinese President Xi Jinping during the G20 meeting in Osaka, Japan, in late June, Kudlow said. - Bloomberg

Bitcoin climbs above $7 000 as cryptocurrency rally extends

Bitcoin climbed to the highest since September, briefly surpassing $7 000, as a rally in cryptocurrencies gathered pace in trading over the weekend.

Bitcoin advanced 11% from Friday to $6 957.73 as of 09:01 Tokyo time, having earlier hit $7 585, according to Bitstamp pricing.

Chinese stocks drop with yuan as trade ralks end in stalemate

Bloomberg News

Chinese stocks fell and the yuan weakened for a sixth day after the weekend’s trade talks with the US ended with no deal in sight.

The Shanghai Composite Index fell 1.1% as of 1:08 p.m. local time after losing as much as 1.6%.

The gauge staged a huge rally on Friday, supported by buying from state-backed funds and speculation Beijing would be able to counter effects of a worsening trade war with stimulus.

The yuan dropped as much as 0.75% in offshore trading Monday, wiping out its gain for the year and approaching 6.9 per dollar.

While Chinese shares remain some of the top performers in world this year, the recent rout wiped out as much as $1.2 trillion in value in just three weeks. Investors based overseas have been taking no chances, dumping mainland-listed shares at a dizzying pace in May following a record month of outflows in April.

That’s just as MSCI prepares to expand their weighting in its benchmarks at the end of this month.

"Trade talks have come to a deadlock and it’s unlikely we’ll see the situation turn for the better in the near term," said Raymond Chen, a portfolio manager with Keywise Capital Management Beijing Ltd. "Now all eyes will turn to China’s policies and how it will stimulate domestic consumption to maintain its growth."