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The comments come after Trump said on Friday that China had "totally violated its agreement with us".
With the NHS and defence getting more funding, cuts to other areas are inevitable, the influential think tank says.
Donald Trump says he will double tariffs on steel and aluminium imports to 50% from Wednesday.
The last shares have been sold from the RBS bailout during the financial crisis. But, with banks facing fresh risks today, has enough changed?
The remarks from both sides raise concerns that a trade war could erupt again between the two largest economies.