Asian markets down as trade war heats up

Oscar PerryJun 22, 2018

Global stocks slid today and US oil prices slumped after US President Donald Trump announced tariffs on Chinese goods and Beijing responded with similar measures in an escalating trade dispute.

Mr Trump said after the legal process is complete, these tariffs worth $200 billion will go into effect if China refuses to change its practices.

Trump today announced tariffs of 25 percent targeting Dollars 50 billion (43 billion euros) in Chinese imports from "industrially significant" technologies, making good on a pledge to punish the alleged theft of American intellectual property.

Neither side has yet imposed tariffs on the other in their growing dispute over technology and the US trade gap; the first round is to take effect on July 6.

"I think that the other side may have underestimated the strong resolve of President Donald J. Trump", Navarro added. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong".

Its Hong Kong-listed shares tumbled 25 percent to a two-year-low, while its Shenzhen shares fell by their daily limit of 10 percent for a fourth consecutive session.

Wall Street's three major indexes closed lower, though the S&P 500's 0.4 percent drop was much more measured than that of overseas markets such as China's.

Big industrial companies and chemical makers are hard hit.

The report said housing starts spiked by 5.0 percent to an annual rate of 1.350 million in May after tumbling by 3.1 percent to a revised rate of 1.286 million in April.

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Separately, the Chinese Commerce Ministry has hit back accusing the USA of blackmailing by threatening to slap additional tariffs on Dollars 200 billion of Chinese goods and warned that it would hit back with comprehensive measures if Washington went ahead with the plan.

"If the U.S. loses its senses and publishes a new list, China will be forced to take comprehensive measures that are both strong in quantity and gravity and will fight back", it read on Tuesday.

Trade frictions between the United States and Canada have been particularly strained in recent weeks, with Trump taking umbrage at remarks by Canadian Prime Minister Justin Trudeau that were critical of the heavy US tariffs. It will impact the global suppliers of goods that are assembled and re-exported from China so many countries will be adversely affected over and above the global steel and aluminium tariffs that have been imposed.

Time is running out for Beijing to fulfil its reform promises if it hopes to maintain stable growth, a top European business lobby said on Wednesday, contending that the roots of U.S. -China Business Council. Parker suggested that such steps might include delaying or denying licenses required by USA companies in China. They've invested a cumulative $256 billion there since 1990 (versus the $140 billion China has invested in the United States), according to the Rhodium Group research firm and the National Committee on U.S.

The White House said it would consult on tariffs on the other $16bn of products, and would apply these later. The US approved on Friday charges of 25% to a thousand Chinese products whose imports add up to 50 billion. The White House is finalizing a list of $16 billion in additional goods it will sanction later. More than 800 exports, about $34 billion worth, will be subject to tariffs starting July 6.

Fortunately, the United States and its global trade partners have learned a lesson from this experience...until the Trump administration.

Mr Trump recently ordered tariffs on 50 billion dollars in Chinese goods in retaliation for intellectual properly theft.

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.

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