Published: Fri, August 02, 2019
Markets | By Erika Turner

Trump threatens 10% tariffs on China, sparking Dow dive

Trump threatens 10% tariffs on China, sparking Dow dive

But in a series of tweets, Trump says China failed to live up to those promises, which is why he is putting new tariffs on new products not previously covered by tariffs. Apple, like other American firms impacted by the tariffs, can decide to eat the entire cost of the tax or pass it on to US consumers in the form of higher prices. The benchmark S&P 500 .SPX, which had been in solidly positive territory on Thursday afternoon, closed down 0.9%. Ten-year Treasury yields dropped to the lowest level in three years. Target Corp (TGT.N) tumbled 4.2%, Macy's Inc (M.N) fell 6% and Nordstrom Inc (JWN.N) was down 6.2%. Roughly $250 billion have already been hit with tariffs.

It is expected that U.S. Trade Representative Robert Lighthizer will come up with a list of items that will be subject to the tariffs.

President Donald Trump tweeted Thursday that he will add a new tariff on $300 billion of Chinese-made products on September 1, which would effectively put a tax on all Chinese goods coming into the United States.

He said the tariff rate could be increased in stages.

The new levies come after United States and Chinese negotiators failed to kickstart trade talks between the world's two largest economies. They were the first in-person meetings since talks broke down in early May.

USA interest rate futures rallied as traders piled on bets that the central bank will cut rates two more times by year's end and reduce them further next year to offset risks from the escalating trade war.

Prices for soybeans shipped to Asia from the PNW this autumn are lower than prices for beans shipped from rival exporter Brazil if China's import tariffs are removed, USA export traders said. Xi agreed to this measure during a previous meeting with Trump at the sidelines of the G-20 in Argentina last December.

Trump to sign September 11 victims' compensation fund extension
Funding was expected to expire in 2020 as it rapidly depleted, and the law now ensures the program never runs out of money. The legislation, which the Senate voted to reauthorize last week, makes the Victims Compensation Fund permanent.

China manufactures most of the fentanyl and fentanyl analogues found in the United States.

In his tweets, Trump accused China of repeated reneging or failing to live up to past agreements.

China has already put its own tariff on $110 billion worth of US products and services, in retaliation for previous USA tariffs. China rejected the claims, with the state-owned Xinhua news agency reporting that millions of tons of U.S. soybeans have been delivered to China since July 19, with local businessmen also looking to purchase cotton, pork and sorghum.

Bond prices jumped as traders sought safety.

It appears that market hopes for a swift return to "business as usual" have now been dashed - with Beijing seeking to cause as much pain to Donald Trump's farming base as it can before the 2020 presidential race.

The new round of tariffs is expected to take effect on September 1.

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