US-China trade war fears hit global stock markets hard
New York : Stock markets fell around the world on Tuesday in the wake of US President Donald Trump’s latest tariffs threat to China.
The Dow Jones was down more than 300 points, or 1.6 per cent, at the open after Asian and European markets fell sharply earlier, reports BBC.
Trump has threatened to put tariffs on an extra $200bn of Chinese goods, sparking fears of a trade war.
The US President said the tariffs would be imposed if China “refuses to change its practices”.
He condemned China’s “unfair practices related to the acquisition of American intellectual property and technology” and added: “Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong.”
The markets reacted badly with China’s Shanghai Composite faring the worst in Asia, ending the day down 3.8 per cent.
In Europe, Germany’s Dax index was down 1.2 per cent by the close and France’s Cac 40 had lost 1.1 per cent.
London’s FTSE 100 ended the day at 7,603.85, a fall of 27 points or 0.36 per cent.
Away from Trump’s dispute with China, Russia said it would impose tariffs on certain American goods in response to the recent tariffs placed on steel and aluminium imports by the US.
Russia’s Economy Minister, Maxim Oreshkin, said the tariffs would target goods of which the Russians already had domestic equivalents.
Last week, Trump confirmed that the US would impose 25% tariffs on $50bn worth of Chinese goods.
Beijing responded by saying it would hit 659 US products worth $50bn – including agricultural products, cars and marine products – with a similar tax.
Late on Monday, Trump added that new tariffs would “go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced”.
“If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200bn of goods.”
China’s commerce ministry reacted swiftly, saying: “If the US acts irrationally and issues a list, China will have no choice but to take comprehensive measures of a corresponding number and quality and take strong, powerful countermeasures.”
The US continued to press China on trade issues on Tuesday.
The Department of Commerce said it would impose new import duties on a common alloy aluminium sheet after finding that Chinese firms were selling it in the US more than 167 per cent below cost. A final determination is due in October.
Trump’s trade adviser, Peter Navarro, told reporters that China may have “underestimated” the President’s resolve in earlier negotiations.
“That was a miscalculation,” he said.
A paper published by Canadian think tank the CD Howe Institute suggests that Trump’s threats are having an effect on US manufacturing by using “uncertainty as a new weapon in trade protection”.
Its study says that uncertainty acts like a non-tariff barrier to impede trade and investment by encouraging American companies to move factories back to the US and reduce incentives for US firms to invest abroad.
Published on: June 20, 2018 at 01:00 IST
IANS
