WASHINGTON (AP) — The Latest on U.S.-China trade tensions (all times local):
President Donald Trump is taking on Mexico and Canada at a time when the United States is engaged in talks with them on the future of the North American Free Trade Agreement.
Trump says in a speech before a small business group that Mexico hasn't done enough to address the flow of drugs through the southern border. And he's accusing Canada of imposing large tariffs on U.S dairy products to the detriment of American farmers.
Trump is reiterating at the National Federation of Independent Business that he's trying to renegotiate NAFTA or he will seek separate trade deals with Canada and Mexico.
The president says, "We have to change our ways. We can no longer be the stupid country."
Economists are starting to warn that the tit-for-tat tariff threats between the United States and China, should they all be implemented, would meaningfully slow U.S. growth.
Oxford Economics estimates that if President Donald Trump imposed the $200 billion in duties that he threatened to implement late Monday, and China responded in kind, U.S. growth could slow by 0.3 percentage point next year.
"It looks like the probability of a full-blown trade war between the world's two largest economies is rising," said Louis Kuijs, an economist at Oxford Economics. "Attitudes seem to be hardening."
Tariffs are already raising costs for some goods. A punitive duty the Trump administration applied to lumber imports from Canada has raised the price of a new home by $9,000, according to the National Association of Home Builders.
The top White House trade adviser, Peter Navarro, says Beijing "may have underestimated the resolve of President Donald J. Trump" by refusing to meet U.S. demands on trade and by threatening to retaliate against American trade sanctions.
Navarro, known for his hard-line approach to China, still says the U.S. is open to talks to resolve the dispute before it imposes tariffs on up to $450 billion in Chinese products.
"Our phone lines are open; they have always been open," he tells reporters.
Navarro also disputes any notion that the trade standoff would damage the broader relationship with China.
"This is a trade dispute — nothing more, nothing less," Navarro says. "President Trump has a great relationship with President Xi" Jinping of China.
Spooked by worsening tensions over trade between the world's two largest economies, investors are selling stocks and commodities and buying safer assets.
The Dow Jones industrial average and the Nasdaq composite index have each dropped more than 1.4 percent in early trading. That follows brisk selling in international markets. Hong Kong's Hang Seng index dropped 2.8 percent and France's CAC 40 slipped 1.4 percent.
The sell-off came after President Donald Trump threatened to impose tariffs on an additional $200 billion in imports from China, and the Chinese government said it would retaliate.
Large U.S. companies with significant overseas business were hit especially hard. Boeing's stock shed 4.3 percent, Caterpillar 4 percent and GE 2.2 percent. Commodities such as oil, copper and soybeans fell.
Bond prices climbed as investors turned more cautious. The yield on the 10-year Treasury note fell to 2.88 percent from 2.92 percent.