‍US President Donald Trump has threatened to impose additional 100 billion US dollars in tariffs on Chinese products. This comes after Beijing unveiled a list of American products subjected to higher tariffs, including soybean, automobiles and chemical products.

Experts warned that the ongoing trade frictions would influence American stock market, treasury bonds, and dollar’s rate. US investors will not be happy with the escalating conflicts since they are gaining huge profits from international production chain.

Trump wants the manufacturing back. But the actions may push American manufacturing industry into a worse situation. US automakers are appealing to the US and the Chinese government for negotiation to avoid a trade war.

US automaker General Motor, which has the largest single overseas market is China, said Wednesday that they urge the two governments to continue constructive dialogue over trade. At the same day, another US auto giant Ford also said that it encourages the two sides to work together to solve the trade issues.

Meanwhile, American aerospace company Boeing also voiced concerns, stressing a vibrant and robust aerospace industry is important to the economic prosperity and national security of both countries.

The trade imbalance between the US and China is the result of the global production network, said Zhao Zhongxiu, vice president at the University of International Business and Economics and an expert on the global production chain. Zhao said the US takes advantage of “the comprehensive lower cost” in the rest of the world through offshore manufacturing. “US Investors (and), the Wall Street gained huge profits from the international production scheme,” Zhao added.

And the disputes have influenced American financial market as well. All major indexes in the US stock market plunged more than one percent, while the US dollar has weakened slightly, according to Hong Hao, chief strategist of BOCOM International.

The classic risk scenario is that American treasury bonds will fall and gold prices will rise, and rate of Japanese yen will rise, said Hong.

He warned if a trade war breaks out, and China considers reducing or stopping buying some of US treasury holdings, it will be a dangerous situation, which may lead to plunging stock and the US treasury bond prices together. 

(CGTN’s Ming Tian and Yan Yunli also contributed to the story.)