Stocks tumble on latest Trump-China trade threats

Cornelia Mascio
Giugno 19, 2018

President Trump urges yet another round of China tariffs, amid the escalating trade war with Beijing.

"Therefore, today, I directed the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent".

"China is also likely to take action against the USA service trade, including transport, tourism and education".

"The fundamental reality is that talk is cheap", Navarro told reporters on a conference call, again accusing China of "predatory" trade policies.

"President Trump has a great relationship with President Xi" Jinping of China. "If they thought that they could buy us off cheap with a few extra products sold and allow them to continue to steal our intellectual property and crown jewels, that was a miscalculation".

The tit-for-tat moves could start to meaningfully slow USA growth, economists warn.

The news sent global stock markets lower and pulled down both the dollar and the Chinese yuan in the offshore market. Shanghai stocks plunged to two-year lows.

The three main US stock index futures fell more than a per cent on Tuesday.

The 10-year U.S. Treasury note yield touched 2.871 percent, its lowest since June 1.

Global stock markets slumped Tuesday after President Donald Trump threatened to put tariffs on another $200 billion United States in imports from China, and the Chinese government said it would retaliate, bringing tensions between the world's two largest economies closer to a boil.

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

China's Commerce Ministry criticised the White House action as blackmail and said Beijing was ready to retaliate.

Secretary of State Mike Pompeo made the remarks at the Detroit Economic Club as global markets reacted to trade tensions between the US and China.

Those tariffs were matched by China's threat to penalize on USA exports, a move that drew the president's ire.

"Investors recognize that China sells us about four times the amount of products we sell them so any diminishment in trade is going to hurt them that much more", said Ablin.

The Trump tariffs, which the USA government says are punishment for intellectual property theft, will be enacted in two waves. "However, China is adamant about not wanting to look weak in this conflict with the United States". Congress scorned Trump's amnesty for ZTE; the press revealed that China hadalready been planning to increase its intake of American agriculture before negotiations with the White House had even begun; and the White House's China hawks pushed the president to chart a tougher course.

- Trader confidence has been hit by the escalating trade war between the United States and China.

Industrial and technology companies took some of the worst losses as investors anxious that the dispute could grow more intense and drag down global economic growth.

Harvard Economics Professor Martin Feldstein on President Trump's trade negotiation strategy.

"The escalating set of tariffs on Chinese goods come as the Treasury Department is developing a set of investment restrictions/export controls on Chinese investment in certain industries and US technology (due June 30)".

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