USA stocks were little changed and the dollar extended losses in early trading in NY. But those moves may have just been a downpayment on what is yet to come.
Stocks closed higher on Thursday as technology shares rose, but investors remained on edge as the US prepared to slap tariffs on goods imported from China.
“But it’s the risk of escalation – specifically Trump’s $500 billion dollar threat, which would cover almost all of China’s exports to the US – that has analysts anxious”, Yanmei said.
The overall monthly US goods and services trade deficit declined to $43.1 billion in May, from $46.1 billion in April.
The US on Friday slapped tariffs on $34 billion worth of Chinese imports to combat what is says are the country’s unfair trade practices. The Peterson Institute for International Economics shows that nearly two-thirds of USA imports from China come from companies with foreign capital, another avenue through which U.S. tariffs targeted at China have an impact beyond its borders.
China’s Ministry of Commerce called this the start of the “biggest trade war in economic history”.
Customs officers had delayed the clearance of some US goods on Beijing’s penalty list last Friday, as they waited for official instructions from the central government on whether to start collecting the new import tariffs.
Beijing vowed to take “necessary countermeasures” after the U.S. imposed 25 percent duties on about $34 billion in Chinese machinery, electronics and high-tech equipment, including autos, computer hard drives and LEDs.
Al Jazeera’s McBride said that the looming trade war has not played well “to the general business sentiment”.
“Tariffs not only hurt our farmers, ranchers and airplane manufacturers, but they also harm every American consumer”, said GOP Sen.
Chinese stocks have taken a beating in recent weeks, entering a bear market, as concerns about the trade war have mingled with worries about China’s ability to control its debt and maintain growth.
“The risk is we underestimate the impact based on these simple back-of-the-envelope calculations”.
Trump’s decision to trigger a trade war isn’t confined to the tit-for-tat exchange with China. The currency’s onshore value was as strong as 6.6221 per dollar on the same day.
A United States flag is seen during a welcoming ceremony in Beijing, China, November 9, 2017. It opened markets for USA farmers but led some American automakers to shift production to low-wage Mexico and to then ship cars back to the United States duty-free. Whoever can take the pain better will not be the one to blink first. Lotte had swapped some land with the South Korean government to enable the missile system’s deployment.
“There should be no doubting Beijing’s resolve”, the China Daily said. It has also dumped and unfairly subsidized a range of goods for the United States market, undermining America’s domestic industry. It could introduce penalties such as customs delays, tax audits and increased regulatory scrutiny, while more drastic steps include devaluing the yuan or paring $1.2 trillion holdings of U.S. Treasuries. He said that Beijing would use that strategy “if it is necessary”.
USA whiskey will be taxed 30 percent, compared with 5 percent for alcohol from other nations.
In a sign market bulls are throwing in the towel, the outstanding value of margin financing – the money investors borrow to buy shares – has rapidly shrunk. However, for the first five months of the year, it totaled $245 billion, up from $227 billion in the same period in 2017. And most USA cars sold in China are made at plants located in China, so they’re immune to tariffs. “A lot of the problems recently are that speculators oversold the soybean market”.