Instead, major USA indexes remained negative as investors instead focused on President Donald Trump’s overnight escalation of a trade war with China. “Unless the president is bluffing to get the Chinese to the negotiating table … this is a risky game, in our opinion”, the footwear association said.
He says he hopes differences can be mended through negotiations.
The U.S. initially announced $3 billion worth of tariffs on Chinese imports, to which the Chinese appropriately responded with $3 billion of tariffs on U.S. made goods.
Asked by reporters outside the White House whether the United States could lose a trade war, Mr Trump’s top economic adviser Larry Kudlow said: “No”.
The markets reacted negatively to the growing confrontation, with the S&P 500 Index down 1.1% as of 11:52 in NY on Friday.
China will not hesitate to respond if the United States adds further tariffs, Commerce Ministry spokesman Gao Feng told a media briefing in Beijing, describing the tariff row as a struggle between multilateralism and unilateralism.
He said the USA was not in a trade war with China.
“China can ditch American energy at any time because there’s plenty of supplies elsewhere, whereas for the US, energy is a sensitive subject”, said Will Yun, a commodities analyst at Hyundai Futures in Seoul.
President Donald Trump had a radio interview with WABC Friday morning, and he doubled down on what he’s recently said about tariffs and China.
None of the tariffs have yet come into effect, but the world’s two largest economies are in a game of chicken that could inflict collateral damage on the global economy.
“We’re cautiously bullish here”, said Dan Hussey, a market strategist at RJO Futures in Chicago. In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs.
Trump’s proposal intensified what was already shaping up to be the biggest trade battle since World War II.
One trade policy expert said he doubted that Trump’s rhetoric would help forge any deal with China.
“China is the problem”.
In the meantime, Kudlow said, Trump would continue standing up to Beijing and escalating things if necessary. “I am committed to enabling American companies and workers to compete on a level playing field around the world, and I will never allow unfair trade practices to undermine American interests”.
Dow futures fell after Trump’s announcement on Thursday and were down almost 200 points, or 0.8 percent, early Friday.
Earlier in the week, Beijing announced separate import duties on $3 billion United States of goods in response to the Trump administration’s duties on all steel and aluminum imports, including from China.
Trump last month authorised the suspension of those fresh tariffs, but only gave the European Union until May 1 to come up with a solution to unfair trade practices alleged by the U.S. leader.
“Dealers are fearful this will result in a full-blown trade war, and equities are feeling the pain”. “The US risks isolating itself from global trade in this process and we think the US, USD and US asset markets have more to lose”.
Many U.S. industry groups and even Republican lawmakers have called for the president to take a more cautious approach, warning that a full-on trade war could devastate agriculture and industry.
“You have to go after the people who aren’t treating you right”, Trump said. China responded firmly to the USA 301 Section investigation report and its proposed tariff list and gave stronger response to its proposal for additional tariffs.
And after a meeting with acting US Secretary of State John Sullivan, Chinese Ambassador to the US Cui Tiankai underscored the need to remain in close communication to restore fairness and balance to economic ties.
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