The August gold contract closed down US$1.50 at US$1,278.60 an ounce and the July natural gas contract ended down five cents at US$2.90 per mmBTU. This situation is no longer sustainable. The bipartisan measure, part of a defense bill, passed 85-10 and came two days before Trump was to host Republican members of Congress to discuss ways that would allow ZTE to survive.
Hong Kong also faced an "unquantifiable impact from the spillover" of the dispute between the USA and Europe, which could trigger trade to divert from Hong Kong to other countries, he said.
The US president's latest move, as Washington fights trade battles on several fronts, was unexpectedly swift and sharp.
White House trade adviser Peter Navarro sought to tamp down investors' worries on Tuesday. "China has, for example, always been engaging in several unfair practices related to the acquisition of American intellectual property and technology", Trump declared last week.
Consumer discretionary stocks slid 1 per cent and materials and energy stocks were off 0.6 per cent.
Still, the TSX is up 0.7 per cent for the year. The German DAX was hit particularly hard, down 1.26 per cent. The S&P 500 was off more than 1%.
"There's definitely some element of pressure here as we go through the trade war fears, as well as the rhetoric for tariffs", said Sid Mokhtari, executive director of institutional equity research at CIBC.More news: Switzerland holds Brazil to 1-1 draw
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Trump said his move followed China's decision to raise tariffs on $50 billion in US goods, which came after the White House announced similar tariffs on Chinese goods on Friday.
Tom Orlik, chief economist at Bloomberg Economics, said that in the event that China's exports to the USA weaken in the face of tariffs, the government would likely seek to offset the growth impact with a combination of subsidies to support domestic demand and higher infrastructure investment. "The trade relationship between the United States and China must be much more equitable", he said.
President Trump said Tuesday that China's economic exploitation of the USA left him with "no choice" but to hit Beijing with tariffs, while the Chinese government warned that it will retaliate for Mr. Trump's "irrational" move, and stock markets plummeted on fresh fears of a trade war.
Still, Trump's stance has angered Beijing with the Ministry of Commerce accusing Washington of "blackmail".
China's commerce ministry reacted swiftly, saying: "If the U.S. 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".
President Donald Trump told Apple Chief Executive Tim Cook that the U.S. government would not levy tariffs on iPhones assembled in China, the New York Times reported on Monday, citing a source familiar with the negotiations.
Trump's proposed new tariffs would amount to the latest round of punitive steps in an escalating dispute between the world's two largest economies. "The idea that they will knowingly drive the economy into recession seems unlikely".