U.S. stock markets fall sharply amid fears of global trade war

WTI Crude Oil

WTI Crude Oil

China imported US$129.89 billion of USA goods a year ago, compared with U.S. purchases of US$505.47 billion of Chinese products, according to United States data.

Wei, who is now a deputy secretary general at the Chinese Centre for International Economic Exchanges, a state-backed think tank, said Beijing might also make its countermeasures permanent rather than temporary, and if the situation worsened USA firms could be excluded from China's financial markets.

"President Donald Trump's unwillingness to back down became apparent this morning, once again sinking markets into a risk-off atmosphere", Jingyi Pan of IG said in a report.

Trump is ratcheting up the pressure on China as he's trying to convince US lawmakers to let Chinese telecom company ZTE Corp. remain in business.

On Monday, Trump said China's tit-for-tat tariff response illustrated the country's unwillingness to change its "unfair practices".

USA business groups said members were bracing for a backlash from the Chinese government that would affect all American firms in China, not just in sectors facing tariffs. Trump is doing what he said he would do: "'Trade wars are good, and easy to win'".

The U.S. blocked ZTE's access to U.S. suppliers in April, saying the company violated a 2017 sanctions settlement related to trading with Iran and North Korea and then lied about the violations.

The statement from Trump on Monday said that China's response showed that Beijing had no plans to address the underlying IP theft and required escalation by the US.

Strong deadly natural disaster rattles Japan
In the larger Osaka Prefecture 170,800 homes and buildings were without power for several hours and water and gas were also off. Another man, 85, died from a falling bookshelf, while another 80-year-old passed away after being struck by part of a wall.

"I think that the other side may have underestimated the strong resolve of President Donald J. Trump", Navarro added.

Global markets sank Tuesday on fears that the United States and China may be veering toward an all-out trade war.

Additionally, the president has promised further escalation in his attack on China's alleged theft of intellectual property and unfair trade practices should it respond with more tariffs on United States goods, promising to pursue tariffs on yet another $200bn of Chinese products. China's Commerce Ministry criticized the White House action as blackmail and said Beijing was ready to retaliate. "The trade relationship between the United States and China must be much more equitable", Trump said.

"Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong".

The dollar rose against a basket of currencies as traders bet on a escalating trade war forcing inflation up in the USA because of costlier imports, raising the prospect of more interest rate rises.

In an interview on Monday, Bart Oosterveld, director of the global business and economics program for the Atlantic Council, a Washington, D.C. -based think tank for worldwide affairs, correctly predicted that the trade spat between the Trump administration and China had at least one or two more rounds in it. "These negative repercussions span a broad spectrum, extending from the risk of domestic political backlash, to the risk of decreased Chinese cooperation on North Korea, to the outside possibility that China will move to test USA mettle with regional security alliances".

"It looks like the probability of a full-blown trade war between the world's two largest economies is rising", said Louis Kuijs, an economist at Oxford Economics. Trump also has slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies.

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