Published: Thu, July 12, 2018
Global Media | By Garry Long

Trump tariffs send stocks tumbling

Trump tariffs send stocks tumbling

The trade war between the world's two largest economies continues to heat up with the United States drafting tariffs on another $200 billion in Chinese imports.

The Chinese government vowed Wednesday to take "firm and forceful measures" against US threats to expand tariff hikes to thousands of products like fish sticks, apples and French doors as their trade dispute escalates. The broader Standard & Poor's 500 index also slid 0.7 per cent. We will immediately lodge an additional complaint with the WTO over the unilateral acts of the United States.

China has become a key trade partner for USA energy exports, and potential tariffs on US energy goods could hurt US producers and industries. It said, "the Chinese government will be forced to impose necessary countermeasures" to protect its "core interests".

"We are stronger together than apart", North Atlantic Treaty Organisation secretary general Jens Stoltenberg claimed in a retort to Mr Trump's comments but the USA leader countered by asking how the North Atlantic Treaty Organisation alliance could be stronger when Germany is "making Russian Federation richer", referring to energy pipeline deals Berlin recently has signed with Moscow.

"Farmers have done poorly for 15 years".

China's commerce ministry said it was "shocked" by Washington's latest move, which comes just days after both countries imposed tit-for-tat tariffs on $34 billion of each other's goods, and ups the ante in a heated trade dispute that has rattled global financial markets.

The lopsided export balance between the two countries acts as a bargaining chip for the USA in when it comes to tariffs.

One of Canada's top economists says Canada is caught in the crossfire of a U.S.

Despite bipartisan support, the Trump administration's latest move drew criticism from House Speaker Paul Ryan, who is retiring at the end of his term in January.

"I don't want to hamstring the president's negotiating tactics, but I have long said I don't think tariffs are the right way to go", Ryan said during a press conference Wednesday morning.

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Across the Capitol, Senator John Cornyn (R-Texas), the chamber's No 2 Republican, said lawmakers were willing to "give the president the room he needs" to negotiate a good deal, but he said he worries that things could "escalate out of control".

"The question is less whether we can do harm to them than, which one can endure the pain the better?"

Both the yen and the dollar act as safe-haven investments but analysts say the strength of the U.S. dollar against the yen means investors have faith in the USA economy rather than seeking safety.

The new tariffs are expected to take effect after Thursday, August 30, 2018.

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", Trump said in June.

The US Trade Representative (USTR) announced Tuesday a possible second round of tariff hikes targeting a $200 billion list of Chinese goods ranging from burglar alarms to mackerel.

Chinese bureaucrats could make life very hard for these companies if they chose to, Ross says.

"China's closest neighbors, namely Japan, Korea and Hong Kong, are most vulnerable to a U.S. -Sino trade war because they export mostly intermediate goods to China", OCBC said in a note.

Just as the US President arrived in Brussels, however, the United Kingdom government announced it will send an additional 440 troops to help support the North Atlantic Treaty Organisation mission in Afghanistan.

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