Sunday, 22 July 2018
Latest news
Main » Markets fall after Beijing accuses Washington of 'blackmail'

Markets fall after Beijing accuses Washington of 'blackmail'

20 June 2018

By targeting goods that are finished in China but whose components are often sourced from neighboring South Korea, Japan and Taiwan and more, the USA strategy could hurt the economies of America's allies too.

China and the United States traded goods and services worth over $650 billion in 2016. That would leave less than $100 billion in USA goods to subject to a tariff hike, far short of the $200 billion Trump is threatening.

The dollar and yen rose on Tuesday as traders piled into perceived less risky currencies after U.S. President Donald Trump threatened to slap more tariffs on China, fanning a trade dispute between the world's two biggest economies.

The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the US, but of the world. "Because the United States does a very good job, I believe, in following the WTO regulations, the World Trade Organization".

China's Commerce Ministry fired back in a statement, "The United States has kept changing its mind and now launched a trade war".

But Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump's watch.

More news: Ronaldo And Messi's Record Against Iceland Is Truly Ridiculous

Because China can apply tariffs to USA goods worth only $130 billion, Beijing will have to find other ways to execute a proportional response.

"The latest headlines from Trump are pushing investors to risk-off-mode", said Shintaro Ikeshima, chief manager of forex and financial products trading division at Mitsubishi UFJ Trust and Banking Corp.

In a briefing with reporters Tuesday morning, White House trade adviser Peter Navarro downplayed the notion that the US was in a "trade war" with China.

"Until this point, the U.S. equity market has done a remarkable job shaking off any trade-war jitters", said analyst Patrick O'Hare.

Shares of Boeing, which has acted as a proxy for trade war tensions with China as it is the single largest USA exporter to the country, fell 3.9 percent, weighing the most on the Dow.

Trump has asked the US Trade Representative to identify $200 billion (173 billion euros) worth of imports to be targeted, adding he would hit a further $200 billion if Beijing retaliates.

More news: Oil prices drop on prospect of rising supplies Oil&Gas 09:40

Beijing also drew up a second list of $16 billion in chemical and energy products to hit with new tariffs, though it did not announce a date for imposing them. "It is very unfortunate that instead of eliminating these unfair trading practices, China said that it intends to impose unjustified tariffs targeting USA workers, farmers, ranchers and businesses".

In contrast, the United States exported only about $130 billion worth of goods to China past year, so Beijing has far less room to raise tariffs in a way that would immediately affect trade.

President Donald Trump pumps his fist as he leaves a meeting Monday in the East Room of the White House in Washington.

Benchmark U.S. crude lost 88 cents to $64.97 per barrel in electronic trading on the New York Mercantile Exchange.

Boeing, which has acted as a proxy for trade war tensions with China as it is the single largest USA exporter to the country, fell 0.8 percent as the biggest drag on the Dow.

"All they can do is impose higher tariffs on a smaller subset of products", he said.

More news: Sanctions Remain Until North Korean Denuclearization

Beijing wants to "demonstrate that things will be done their way or not at all", said Christopher Balding, an economics professor at Shenzhen's HSBC Business School, who believes Chinese policymakers prefer demonstrations of "power and control" over "technical policy rightness".

Markets fall after Beijing accuses Washington of 'blackmail'