Published: Tue, September 18, 2018
Economy | By

Stocks tumble as markets brace for Trump's next round of tariffs

Stocks tumble as markets brace for Trump's next round of tariffs

Trump had warned on Monday that if China takes retaliatory action against USA farmers or industries, "we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports".

Trump accused China in a pair of tweets Tuesday of targeting American workers in the heartland, wrongly saying the country had "openly stated" it was aiming to sway USA elections.

"The economy and trade had been seen as Trump's strong point, however, his presidential approval rating has dropped four percentage points over the past month to just 38%". Cook's visit was followed by a letter from Apple to U.S. Trade Rep. Robert Lighthizer requesting the government seek other policies to address trade issues.

In the letter sent earlier this month, Apple said a range of its products would be hit and warned that the proposed tariffs, which could lead to higher production costs, higher consumer prices and "lower overall USA economic growth, and other unintended economic consequences".

"Once again, I urge China's leaders to take swift action to end their country's unfair trade practices", Trump said.

China has been pushing back against the threat.

Global stocks edged up Tuesday despite continued threats of tariffs between the USA and China, with investors increasingly anticipating friction and hopeful that any trade barriers will be introduced gradually.

Trump's latest escalation of tariffs on China comes after several rounds of talks yielded no progress.

US futures pointed to gains of 0.1% at the opening bell for the S&P 500, the Nasdaq Composite Index and the Dow Jones Industrial Average. Markets were also weak across Asia.

The latest round came after talks between the world's two largest economies produced no results. It has been given new life, and is thriving. "Start building new plants now", he tweeted on Sept 8.

The tough talk follows reports China is deliberately reducing exports to the United States by slowing down customs approvals and stepping up environmental and other inspections.

Earlier, China vowed that it will not play defense in the escalating trade dispute, adding further fuel to tensions as a new list of items subject to tariffs, including technology and consumer goods, was anticipated from Washington. It said only that the tariff hike "brings new uncertainty to the consultations". China has said it will hit back.

As Beijing runs out of USA goods for retaliation, American companies say regulators are starting to disrupt their operations.

Last week, the American Chambers of Commerce in China and in Shanghai reported 52 per cent of more than 430 companies that responded to a survey said they have faced slower customs clearance and increased inspections and bureaucratic procedures.

U.S. President Donald Trump made a decision to begin taxing the imports - equal to almost 40 per cent of goods China sold the United States previous year - after a public comment period.

Oil prices rebounded from earlier losses as supply concerns outweighed assurances from Washington that Saudi Arabia, Russia and the United States can raise output fast enough to offset falling supplies from Iran and elsewhere.

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