United States stocks tumble on latest Trump-China trade threats

United States stocks tumble on latest Trump-China trade threats

The US imposition of tariffs on a range of Chinese imports, which means an added tax on imported goods from China, was the first step in a series of measures announced by the Trump administration.

Comments from top officials in the Trump administration suggest the trade tensions will not dissipate anytime soon.

The ongoing trade dispute between the United States and China knocked the yuan to 6.4660 per dollar, its weakest in more than five months in the offshore market.

The battle between Trump and Beijing has kicked into high gear over the past week.

President Donald Trump has directed the US Trade Representative to prepare new tariffs on 200 billion dollars (£150 billion) in Chinese imports as the two nations moved closer to a potential trade war. These penalties would take effect, the White House said, "if China refuses to change its practices" and proceeds with its plans for retaliatory tariffs. "We have no choice".

Broadening the list of inbound products from China subject to higher taxes would also ultimately raise prices for U.S. consumer goods. "For many American families, these increased costs will wipe out any gains from tax reform", said Hun Quach, vice president of worldwide trade for RILA. They buy shoes and they wear 'em they scuff 'em up... "We hope going forward there are no more miscalculations".

Trump said Monday that China's response "indicates its determination to keep the United States at a permanent and unfair disadvantage".

"Our phone lines are open; they have always been open", he tells reporters.

In a speech to the Detroit Economic Club on Monday, Secretary of State Mike Pompeo accused China of "an unprecedented level of larceny", NPR's Michelle Kelemen reports. "But it's a joke", Pompeo said. "This is a problem that is long overdue in being tackled".

Neither side has yet imposed tariffs on the other in their growing dispute over technology and the USA trade gap; the first round is to take effect on July 6. This approach to trade, economists said, is based on a false understanding of how the global economy works, one that also plagued American policy-makers almost a century ago.

More news: Supreme Court Brings Tax Law Into The 21st Century

Caught in the middle of the fight between Trump and Beijing are U.S. consumers and businesses.

The exchange of blows between Washington and Beijing has heightened fears of a protracted dispute that could hurt global growth and particularly Europe, given that Trump has signalled he wants to impose tariffs on automotive exports. Many US trading partners reacted by raising their own tariffs, which contributed to shutting down global trade. "But investors should be cautious".

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.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.72 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.81 percent its emerging market index .MSCIEF fell 1.9 percent.

The MSCI world equity index, which tracks shares in 47 countries, fell 0.3 per cent, nearing a seven-day low.

It was retaliation, Trump said, for China's decision to raise tariffs on $50 billion in us goods, which came after Trump announced similar tariffs on Chinese goods on Friday. While U.S. crude will continue flowing to market even with tariffs, "it'll force you to put your oil somewhere else, and it'll cost you more" to line up other buyers. Trump's original $50 billion tariff list was heavy on industrial equipment.

Analysts say Beijing is determined to develop its technological prowess and create world-leading companies in such fields as robotics and electric cars under a program it calls "China 2025". China clearly disagrees, which is why we believe we are heading into a tit-for-tat scenario, in which we believe the U.S. will soon raise the amount subject to tariffs to USD150bn.

"There will likely be no rest for the tired among trade warriors and their watchers in the months ahead", the Deutsche Bank economists said.

But the ongoing rhetoric between Beijing and the Trump teams has left little hope for a quick solution.

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