USA employment numbers to be released Friday will likely move markets barring any new action on the trade front, said Chopra. USA business executives and economists say US consumers foot much of the tariff bill. The new tariffs will hit a vast range of consumer products from cellphones to silk scarves.
The surprise announcement came a day after face-to-face talks between USA and China negotiators concluded in Shanghai.
China's foreign minister criticized the move.
When they came home, they said "we're talking" and we have another meeting in early September.
On Wall Street, the Dow Jones share index fell sharply, tumbling about 1%. It ended the day 280 points lower. But he had suspended the threat after meeting Xi at a gathering of the Group of 20 major economies in Osaka, Japan.
"Any consumer impact is very, very small, minuscule".
"Attention all Target & Wal-Mart shoppers. the price on the goods you buy ahead of the holidays are going up due to trade policy", tweeted Joseph Brusuelas, chief economist at the consultancy RSM. This was the oil market's reaction to Trump's vow to slap a 10 percent tariff on $300 billion of Chinese imports, as well as his warning of a potential further increase if China fails to strike a trade deal with Washington in the near future. Speaking to reporters Thursday at the White House, Mr. Trump complained Xi is "not moving fast enough".
The tariff will affect products like Apple iPhones, other electronics, toys and shoes.
"Rather than giving in to the USA demand, we expect China will firm up its bottom lines and formally use the strategy of waiting it out", wrote analysts Li-Gang Liu, Xiaowen Jin and Xiangrong Yu.
It's the latest exchange in the trade battles between the two largest economies in the world.
American officials accused Beijing of reneging on core commitments they had previously made during the talks.
On Thursday, Mr Trump's former chief economic adviser, Gary Cohn, said in a BBC interview that the tariff battle was having a "dramatic impact" on United States manufacturing and capital investment. "I don't expect the Chinese to sit by ..." In a statement Friday, China's Commerce Ministry said there will be "necessary countermeasures" if Washington implements another tariff hike.
The resulting tensions have also influenced the USA central bank, the Federal Reserve, which cut interest rates on Wednesday for the first time in a decade.
Later on Wednesday and early on Thursday, oil prices dropped as the Fed delivered the widely expected rate cut, but Fed Chair Jerome Powell said that "it's not the beginning of a long series of rate cuts", dampening hopes of a long period of monetary easing.
German bond yields hit record lows.
In contrast, the risk sensitive Australian dollar dropped to a seven-month low of $0.6795 while the yuan slid to its weakest since November 2018, softening by over 0.7% to 6.95 per dollar in onshore trade and fell to 6.9563 in the offshore market.