President Trump Eyes an Additional $500B Worth of Tariffs on Chinese Goods

23 July, 2018, 12:42 | Author: Shannon Aguilar
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Hang Seng fell to nine-month lows in early trading, but reversed losses as Chinese stocks staged a sharp rebound.

Ultimately, the trade war with China could end up being a major losing endeavour for the United States, assuming that Trump isn't merely bluffing in order to facilitate further discussions on what he would consider an amicable trade agreement.

The Stoxx Europe 600 extended declines to 0.8 percent, led by cyclical sectors including auto and mining, while the VStoxx jumped.

In April, he tweeted: "Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates".

"If there's a toss-up between raising and not raising (rates), you wonder what role these types of comments might possibly play", said Sameer Samana, a strategist for the Wells Fargo Investment Institute.

That came after Trump CNBC on Thursday aired portions of a Trump interview in which he criticized the Federal Reserve's current course of interest rate hikes. 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", Trump said. "This is still in line with the broader PBOC policy of introducing more volatility and letting the market play itself out".

Asian stock markets were already edgy after Wall Street shares declined overnight amid the latest flare up in trade tensions, with the Dow shedding 0.53 percent and the S&P 500 declining 0.39 percent.

Short-term bond yields inched higher.

Wholesale gasoline rose 1.2 percent to $2.07 a gallon. South Africa's rand gained 1 percent to 13.41 per dollar.

The US dollar bought 111.55 Japanese yen, lower than 112.47 Japanese yen of the previous session.

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Some of the numbers in the video may be in dispute, but the potential of devastating losses to U.S. farmers is a concern voiced by many agricultural groups and their representatives. 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. The stock climbed 1.8 percent to $106.31. GE, which has been selling and splitting off businesses, also cut its forecast for how much cash its businesses will generate.

In the past two days - since Trump said in an interview with CNBC on Friday that he was ready to take a more aggressive approach by imposing tariffs on US$500 billion worth of Chinese products - neither the Chinese commerce ministry nor the foreign ministry has issued any statements.

Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports. return, China levied taxes on the same value of U S products.

Last week, the Trump administration also identified a further $200bn in Chinese goods it may target for tariffs, for a total of $250bn.

"Chinese authorities have been responding to Mr. Trump's threat of tariffs (by) continuously devaluing the yuan, a policy move that has the impact of making exports into China more expensive", said Boris Schlossberg, managing director at BK Asset Management.

A top Federal Reserve official, meanwhile, warned the trade war could hurt the USA economy.

Unlike the dollar or euro, the yuan does not float freely against other currencies.

Despite Trump's claim, the yuan has been rising steadily if gradually in recent years, as most economists and officials say Beijing actually has been intervening in currency markets to keep the currency from weakening. China promptly levied taxes on the same value of USA products.

USA crude rose 0.81 percent to $70.02 per barrel and Brent was last at $73.15, up 0.79 percent on the day.

The yield on Europe's benchmark bond, the German 10-year Bund, hit a one-month high of 0.39 percent while USA 10-year Treasury yields also hit their highest in a month at 2.90 percent. The Chinese central bank implemented the sharpest one-day lowering of the trading range for the yuan in two years.

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