Published: Tue, May 14, 2019
Finance | By Loren Pratt

Stocks Fall After China Announces Retaliatory Tariffs

Stocks Fall After China Announces Retaliatory Tariffs

US oil benchmark West Texas Intermediate (WTI) crude futures were down 0.2 percent to $61.58/barrel in early trading. Eastern Time. Boeing and Caterpillar fell the most in the Dow.

Hong Kong's Hang Seng Index was down 1.6 percent on Tuesday afternoon.

A new aid program would be the second round of assistance for farmers, after the Department of Agriculture's $12 billion plan previous year to compensate for lower prices for farm goods and lost sales stemming from trade disputes with China and other nations.

The result has been a volatile week-long roller coaster with no end in sight. But China has taken so advantage of the US for so many years, that they are way ahead (Our Presidents did not do the job).

Last Thursday morning the Dow skidded 580 points, only to regain almost 470 by close of trading on Friday.

Trump and Chinese President Xi Jinping will likely talk at the G-20 summit late next month in Japan, Kudlow said, and China's ambassador has invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing.

The trade war between the United States and China has suddenly escalated, sinking the view held only a few weeks ago that a trade deal between the two nations was inevitable. And China's retaliatory tariffs are inflicting pain on American farmers, a key part of Trump's political base.

"I think that China felt they were beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the United States of America for $500 Billion a year", Trump said.

Trump's pledge on Friday to buy American farm products that China normally imports and distribute them to poor countries drew criticism from Canada.

"If you do that, then you run the risk that the Trump administration decides to do a "ZTE", referring to when Washington past year banned all sales of electronic components to the Chinese telecoms giant, jeopardising its very existence.


Xi is resisting giving in on a list of trade compromises, even in the face of tariffs that threaten to add 25 per cent to the cost of goods shipped from China to the U.S.

Trump sent out a series of tweets on Monday responding to Kudlow's comments.

The S&P 500 on Friday racked up its worst weekly decline since December, as Washington raised tariffs on Chinese goods worth US$200 billion to 25 per cent from 10 per cent.

The president said Monday that that's not inevitable. We will be taking in tens of billions of dollars in tariffs from China.

The president suggested that manufacturers who make goods in China could shift production to other countries to avoid the tariffs.

'Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. Chinese regulators have instead targeted American companies in China by slowing down the clearing of shipments through customs and the processing of business licenses.

Last July, Trump began gradually slapping tariffs on Chinese imports.

They include 'forced tehnology transfer, ' a phenomenon in which China's government requires foreign companies to share control of their operations with Chinese companies - often giving their competition direct access to their trade secrets. Signs that investors are concerned about the economic impact of the escalating trade war also appeared in the corporate bond market and commodities markets. "Both sides will pay", he told Fox News.

The trade tensions have also rattled financial markets, jeopardizing a USA stock market rally that Trump sees as a vote of confidence in his economic policies.

Goldman Sachs economists said in a research note new evidence showed the costs of Washington's tariffs on China past year had fallen entirely on USA businesses and households, with no clear reduction in prices charged by Chinese exporters.

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