Published: Fri, June 22, 2018
Markets | By Erika Turner

Trump calls for US$200B more tariffs on China; US futures drop

Trump calls for US$200B more tariffs on China; US futures drop

USA stocks started Tuesday's session in a sea of red after President Donald Trump threatened to place tariffs on an additional US$200bn worth of Chinese imports. The euro's partial recovery came a day after it was hammered by the ECB's rate announcement that was accompanied by a cut in the central bank's eurozone growth outlook, citing rising protectionism and global trade fears.

"We are likely to see a cold war from economics to other areas", he said.

There are few companies with more to lose than Apple in a trade war between the United States and China.

The battle between Trump and Beijing has kicked into high gear over the past week.

On Monday night, Trump told his USA trade representative, Robert Lighthizer, to target an additional $200 billion in Chinese goods for 10 percent tariffs. Trump says he is taking action because China has raised tariffs on USA exports and "has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology".

Smaller, more USA focused stocks were doing better than more internationally-focused US stocks, said Mokhtari. "We have no choice".

On a day when the Dow dropped as much as 400 points because of fears of a US-China trade war, Navarro played down fears that escalating tariffs would harm the US economy.

Its study says that uncertainty acts like a non-tariff barrier to impede trade and investment by encouraging American companies to move factories back to the United States and reduce incentives for USA firms to invest overseas.

"They buy shoes, then they wear them. We hope going forward there are no more miscalculations". As a result, the Russian minister, Maxim Oreshkin, said Moscow would assert its rights as guaranteed by the World Trade Organization (WTO) to retaliate with duties against US imports.

"Our phone lines are open; they have always been open", he tells reporters.

Pompeo said, "Let's be clear: It's the most predatory economic government that operates against the rest of the world today".

Given the escalating rhetoric on trade, some investors said the slide in USA stocks was relatively small.

Instagram announces IGTV - a new app for watching long-form videos
Instagram's IGTV is ultimately going to be a direct competitor to YouTube, but the company is also targeting Snapchat's Discover. And just like television, you can watch videos from a particular channel - the channels being creators you follow on Instagram .

"Our view is that these actions are necessary to defend this country, and that they are ultimately bullish for Corporate America, for the working men and women of America, and for the global trading system", he said.

Caught in the middle of the fight between Trump and Beijing are USA consumers and businesses.

But after matching USA tariffs, the world's second-largest economy is starting to run out of options after importing just $129.8 billion of American imports. This causes costs to increase for businesses that use those goods as parts for their final product. Bonds became more attractive to investors.

The Deutsche Bank economists Brett Ryan, Peter Hooper, and Matthew Luzzetti found that the tariffs introduced by Trump could push up inflation and result in a drag on economic growth.

-China trade dispute hit stock indexes around the globe. Dow futures added 0.3 percent and the broader S&P 500's futures were up 0.2 percent.

In essence, they said, consumers are likely to pay more for goods that are subject to tariffs and buy less as a result, which would slow the growth of the U.S. economy.

It was retaliation, Trump said, for China's decision to raise tariffs on $50 billion in USA goods, which came after Trump announced similar tariffs on Chinese goods on Friday. "We can no longer be the stupid country". That makes US goods more expensive in other markets.

"Second, the potential financial market and confidence impact would be substantial". Trump's original $50 billion tariff list was heavy on industrial equipment. Even the Business Roundtable, an influential business lobby, urged the president to step back from the trade fight.

Analysts say Beijing is determined to develop its technological prowess and create world-leading companies in such fields as robotics and electric cars under a program it calls "China 2025".

Russia's economic development minister revealed Tuesday that his government was prepared to side with China in a burgeoning global trade war with the U.S.

"There will likely be no rest for the tired among trade warriors and their watchers in the months ahead", the Deutsche Bank economists said.

Like this: