Stock markets have fallen around the world in the wake of President Trump's latest tariffs threat to China.
Traders at the New York Stock Exchange. Photo: AFP
The Dow Jones was down more than 300 points, or 1.6 percent, at the open after Asian and European markets fell sharply earlier.
Mr Trump has threatened to put tariffs on an extra $US200bn of Chinese goods, sparking fears of a trade war.
The US president said the tariffs would be imposed if China "refuses to change its practices".
He condemned China's "unfair practices related to the acquisition of American intellectual property and technology" and added: "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong."
The markets reacted badly with China's Shanghai Composite faring the worst in Asia, ending the day down 3.8 percent.
In Europe, Germany's Dax index was down 1.2 percent by the close and France's Cac 40 had lost 1.1 percent.
London's FTSE 100 ended the day at 7,603.85, a fall of 27 points or 0.36 percent.
Away from Mr Trump's dispute with China, Russia said it would impose tariffs on certain US goods in response to the recent tariffs placed on steel and aluminium imports by the US.
Russia Economy Minister Maxim Oreshkin said the tariffs would target goods of which the Russians already had domestic equivalents.
How did the latest spat unfold?
Last week, Mr Trump confirmed that the US would impose 25 percent tariffs on $50bn worth of Chinese goods.
Beijing responded by saying it would hit 659 US products worth $US50bn - including agricultural products, cars and marine products - with a similar tax.
Late on Monday, Mr Trump added that new tariffs would "go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced".
"If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200bn of goods."
China's commerce ministry reacted swiftly, saying: "If the US acts irrationally and issues a list, China will have no choice but to take comprehensive measures of a corresponding number and quality and take strong, powerful countermeasures."
The US continued to press China on trade issues on Tuesday.
The Department of Commerce said it would impose new import duties on a common alloy aluminium sheet after finding that Chinese firms were selling it in the US at more than 167 percent below cost. A final determination is due in October.
Mr Trump's trade adviser, Peter Navarro, told reporters that China may have "underestimated" the president's resolve in earlier negotiations.
"That was a miscalculation," he said.
'Encourage collaboration'
A paper published by Canadian think tank the CD Howe Institute suggests that Mr Trump's threats are having an effect on US manufacturing by using "uncertainty as a new weapon in trade protection".
Its study says that uncertainty acts like a non-tariff barrier to impede trade and investment by encouraging US companies to move factories back to the US and reduce incentives for US firms to invest abroad.
And in a speech later on Tuesday, the UK's international trade secretary, Liam Fox, will call on nations to stop using tariffs and similar measures as the first course of action in trade disputes.
Instead countries should "encourage collaboration" through multilateral bodies such as the World Trade Organisation (WTO), he will say.
Dr Fox will say the WTO should be encouraged to "operate more effectively in supporting the global economy" and tackle a range of issues including transparency of ownership and intellectual property issues - especially forced technology transfer.
"China must play its part, opening its markets and ensuring compliance in all these areas.
"Unless we maintain an open and liberal global trading system, reducing tariffs and non-tariff barriers, we will put at risk future jobs, growth and prosperity."
How has the dispute escalated?
- January 2018 - The US announces tariffs on imported solar panels and washing machines
- March - Mr Trump unveils plans for a 25 percent tariff on steel imports and a 10 percent charge on aluminium
- April - China announces tariffs on US imports ranging from 15 percent to 25 percent on goods ranging from steel pipes to pork
- May - The US and China put tariff plans "on hold" after talks
- June - Mr Trump decides to push on with plans to impose tariffs in July
- BBC