The Latest: White House adviser Navarro says China 'underestimated' Trump's resolve

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WASHINGTON (AP) — The Latest on U.S.-China trade tensions (all times local):

11:14 a.m.

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.


10:30 a.m.

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.