Tuesday, 11 December, 2018


Trump threatens tariffs on all US$505 billion of Chinese imports

The US launches a trade war against China Trump threatens tariffs on all US$505 billion of Chinese imports
Conrad Doyle | 23 July, 2018, 03:40

USA stocks inched lower Friday as bond yields jumped, a shift that helped banks but hurt companies that pay big dividends.

Trump supporters eager to get their hands on Trump-themed shirts and hats may have to wait more than they normally would have - and it's all thanks to the president's tariffs.

Stocks have wobbled this week as investors reacted to solid company results as well as heightened trade tensions. The Australian dollar climbed to $0.7425 from $0.7358.

The United States and China have slapped tariffs on billions of dollars of each other's goods, and President Donald Trump is threatening to strike again at even more Chinese exports.

Last month, the Fed raised its benchmark rate for a second time this year and projected two more increases in 2018.

"Currency is now part of the trade war, folks", said Greg McKenna, market strategist at AxiTrader.

Trump placed tariffs on a wide variety of goods and the moves are starting to make an impact on the United States economy, prices, and more. But it's something investors will have to think about. "I'm not doing this for politics, I'm doing this to do the right thing for our country". "This is still in line with the broader PBOC policy of introducing more volatility and letting the market play itself out".

In Taipei, the TAIEX on Friday closed up 96.73 points, or 0.89 percent, at 10,932.11 on turnover of NT$164.46 billion (US$5.35 billion). The Nasdaq composite fell 1 point to 7,824. The MSCI Emerging Market Index gained 1.1 percent.

Short-term bond yields inched higher.

Spot gold rose 0.1 percent to $1,222.85 an ounce.

Long-term bond prices dropped.

Benchmark 10-year US notes last fell 13/32 in price to yield 2.895 percent, from 2.847 percent late on Thursday. That makes it more attractive for investors to hold United States dollars, prompting them to sell other currencies. The euro rose to $1.1713 from $1.1644. The company said it's being helped by its rivalry with Amazon, because some retailers are reluctant to team up with Amazon on cloud computing services while they compete with Amazon in sales. GE, which has been selling and splitting off businesses, also cut its forecast for how much cash its businesses will generate.

MORE TARIFF TALK: In a taped interview with the business channel CNBC, Trump said "I'm willing to go to 500", referring roughly to the $505.5 billion in goods the US imported past year from China.

The threat to place tariffs on all Chinese goods sent to the U.S. would effectively end the tit-for-tat trade battle between the two nations, as Chinese imports from the United States are a comparatively small $129.9 billion. The Trump administration is considering tariffs on another $200 billion in goods.

In reality though, when it comes to the Yuan's recent fall against the Dollar, Trump largely has himself to blame for creating an atmosphere of negative speculation against the Chinese economy due to his tariffs and threats of many more tariffs.

As the trade war escalates, so have analysts' estimates of potential economic consequences.

When it comes to the Yuan's downturn against the Dollar, Trump has thus far pointed all fingers at China. That helps Chinese exporters, because it effectively makes their products cheaper. This week brings a JP Morgan assessment, cited in this Financial Times editorial, suggesting Trump's tariffs don't pose significant risk for the global economy.

Moody's Analytics estimates that if the tariffs were imposed on autos and most Chinese imports and other countries retaliate as expected, annual USA growth would slow by 0.5 percentage point by mid-2019. Earlier this year, he used national security as a justification for taxing imported steel and aluminum. Heating oil edged up 0.7 percent to $2.10 a gallon. South Korea's Kospi added 0.3 per cent to 2,288.57. Natural gas lost 0.4 percent to $2.76 per 1,000 cubic feet. Copper jumped 2.2 percent to $2.76 a pound.

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