U.S. plans limits on Chinese investment in technology firms

Republican presidential candidate Donald Trump gestures while delivering a speech at the Alumisourse Building in Monessen Pennsylvania.—Rueters

Chinese investment has provided jobs and tax income for the U.S., and it should view commercial activities "objectively", Foreign Ministry spokesperson Geng Shuang told reporters in Beijing on Monday.

President Donald Trump has raised concerns about China's plan to strengthen high-tech industries like robotics, aerospace and computer chips, also known as Beijing's "Made in China 2025" policy. Katainen urged China to tackle overcapacity in its steel, aluminum, and other sectors including technology, the European Union said in a statement.

The EU and China have called Trump's actions "totally unacceptable" and an "act of extreme pressure and blackmail" respectively, and retaliated with billions of dollars worth of tariffs of their own.

A Chinese woman adjusts a Chinese national flag next to USA national flags before a Strategic Dialogue expanded meeting, part of the U.S.

Large technology shares also had a bad day, with Amazon losing 3.1 per cent, Facebook and Google-parent Alphabet falling 2.7 per cent, and Netflix down 6.5 per cent.

As well, USA motorcycle maker Harley-Davidson said on Monday that it would move some production overseas to avoid European tariffs, potentially affecting U.S.jobs.

US technology stocks were worst hit. Some U.S. steel and aluminium tariffs went into effect in April and additional tariffs begin in July. First, President Trump tweeted that "all countries" would have to remove trade barriers or tariffs on imports or face retaliation from the U.S.

U.S. Treasury Secretary Mnuchin has been reluctant to back steep tariffs on Chinese goods, fearing the impact on global supply chains.

USA and Canadian stocks suffered their worst one-day decline in several months on Monday, amid rising global trade tensions and their potential impact on the world economy.

The report, citing eight sources familiar with the plan, said such a move would put "Washington's trade war with Beijing on a potentially irreversible course".

The administration could expand existing authorities for the Committee on Foreign Investment in the United States, or CFIUS, which is led by the Treasury and which already has blocked some Chinese investments in ports and semiconductors.

Meanwhile, later this week, the Treasury Department is due to unveil a proposal on investment and export restrictions.

The Nasdaq ended more than 2% lower, while the Dow Jones Industrial Average and the S&P 500 dropped more than 1.3%.

But White House adviser Peter Navarro in a confusing interview with CNBC said first that there was no plan to impose investment restrictions on China or other countries, that the U.S. was not singling out China, and then said Treasury would present a report on investment restrictions on China on Friday.

Policymakers in China moved quickly to temper any potential economic drag from Beijing's dispute with the United States.

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