Stocks plummet on fears of U.S.-China trade war

April FrancisMay 07, 2019

In this case, the tariff rate would rise only if the two sides are unable to come to an agreement by Thursday, before the increase takes effect on Friday.

President Donald Trump dramatically increased pressure on China on Sunday to reach a trade deal, saying he would hike US tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.

Commodities trader Cargill said in March that U.S.

Complaining that trade talks with China were moving too slowly, he also said he would impose tariffs on $325 billion worth of products from China, accounting for all of its exports.

China signaled on Monday it still plans to attend upcoming trade talks in Washington. Trump said in a tweet. That would be a classic Trump negotiating move, as it would jeopardize a almost done deal by causing embarrassment to the other side.

Adding to weakness in the sector is the United States drive to increase output, which comes as it reports rising stockpiles, which are offsetting unrest in Libya, tensions with Iran and production caps by OPEC and Russian Federation.

To pressure China, Trump has even threatened to slap tariffs on all Chinese products entering the USA - they were worth $539.5 billion previous year. The president makes big threats, and stocks fall; then, there is calm, or the president says talks are productive, or he delays deadlines to impose tariffs, and stocks go up.

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The tariffs imposed by Trump in 2018 cost the US economy $6.9 billion last year-above and beyond the $12.3 billion paid by American consumers and importers to the federal government. That sent Chinese equities and US stock index futures tumbling, with the CSI 300 gauge of large-cap shares traded in Shanghai and Shenzhen sliding 5.8 percent¥.

"President Trump set the tone for the week, expressing dissatisfaction at the pace of China trade negotiations amid Beijing's attempt to renegotiate", Rodrigo Catril, a senior foreign-exchange strategist at National Australia Bank, wrote in a morning note.

Chinese news outlets have been told not to independently report on Trump's tweets, and instead adhere to any report from the official Xinhua news agency, said a source with direct knowledge of the matter. Only last week it was being reported that a trade deal may be struck by the end of this week.

After Trump announced that he was increasing tariffs on China, Schumer urged the president to "hang tough" against one of America's greatest geopolitical adversaries. On Friday, he had cited good progress in trade talks and praised his relationship with Chinese President Xi Jinping.

Trump took a hard line on Sunday, saying that on Friday he would impose 25% tariffs on $325 billion of Chinese products now free of tariffs and raise to 25% from 10% the existing tariffs on $200 billion of goods made in China.

The motorcycle manufacturer said European Union and China tariff-related costs were $23.7 million in 2018 and are expected to range between $100 million and $120 million in 2019.

"The choice of announcing the targeted RRR cut today is very likely to be used to offset the negative impact of the sudden shift of the U.S". Hopes for an accord have contributed to the big run-up in stock prices in the US and China so far this year. "Where China will agree to more purchases of USA agricultural output and maybe a few other small concessions, and the United States will agree to drop some punitive tariffs, bringing us more or less back to where we were in 2016". Oil prices were also down, with crude futures dropping 26 cents to $61.68 a barrel.

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