Trade relations between Beijing and Washington risk descending into all-out conflict, with US President Donald Trump having threatened to impose tariffs on nearly all of Chinese exports to the United States.
"Changes in trade policy could cause us to have to question the outlook", Federal Reserve Chairman Jerome Powell said during a panel discussion at a European Central Bank conference in Sintra, Portugal.
The European Union (EU) on Friday levied tariffs on estimated $3.2 billion worth of American goods, in retaliation for tariffs US President Donald Trump's tariff imposition on imported steel and aluminium. The EU does not rely on the U.S.as a market for its steel exports as much as Canada or Mexico, which are also being hit by the US tariffs and stand to lose more.
"We don't want to do anything that would harm consumers", he said on Thursday. The move is in response to the U-S tariffs imposed on E-U metal exports.
But the administration's insistence that the U.S. was hit with disproportionate tariffs from key trading partners "is simply not true", wrote Gregory Daco, head of U.S. Economics at Oxford Economics, in a research note.
India joined the European Union and other US trading partners in retaliating against the Trump administration's tariff hikes on steel and aluminum Thursday by raising import duties on a variety of goods, including almonds, apples and some metal products.
"It will be a disaster", said Nagesh Balusu, manager of the Salt Whisky Bar and Dining Room in London and expects the European Union's tariffs to add more than $7 to the price of a bottle of Jack Daniels, which is imported from Tennessee.More news: How President Putin missed, reacted to Russia's 3-1 win over Egypt
"The United States' decision to impose tariffs on Europe goes against that".
On May 31, the White House announced that it would be ending the exemptions at the end of that day.
As painful as the brewing trade war could prove, many have seen it coming.
The new duties have been imposed as tensions over trade continued to grow between the U.S. and China. China also hinted that another $16 billion in tariffs could be slapped onto more American goods, such as coal, crude oil, natural gas and medical equipment.
Trade representatives from India and the United States are set to meet in New Delhi next week.
"The EU has a responsibility to stand up for open global trade".