Friday, 05 June, 2020

China to impose tariffs on $60 billion of United States goods

Enlarge this image Enlarge this image
Ginger Lawrence | 14 May, 2019, 07:09

But China has taken so advantage of the USA for so many years, that they are way ahead (Our Presidents did not do the job).

Technology stocks are bearing the heaviest losses. Chipmakers were among the biggest decliners.

Investors fear further escalation in the dispute between the world's two largest economies could undermine global growth.

Many of those concerns may be overstated.

The Washington Post reported Monday evening that the Office of the U.S. Trade Representative had begun to prepare those levies.

A man browses his smartphone on a bench with a decorated with USA flag outside a fashion boutique selling US brand clothing at the capital city's popular shopping mall in Beijing, Monday, May 13, 2019. Earlier, it was down 719 points. Apple fell 6.1% and Cisco slid 4.2%. Therefore, China should not retaliate-will only get worse! The S&P 500 and the Dow both had their largest percentage drop since Jan 3. Eastern Time. Boeing and Caterpillar fell the most in the Dow.

US President Donald Trump last week increased tariffs on $200 billion worth of Chinese goods to 25% and ordered US trade officials to start looking into imposing tariffs on another $300 billion worth of Chinese goods.

Gold prices rose to a near three-month high. This means each job cost $815,000, which is an expensive and inefficient way to boost US employment.

"This just got messier and more expensive to the global economy and until we get break here, markets are going to be under pressure", said Art Hogan, chief market strategist at National Securities in NY.

Technology, industrial and consumer-focused companies are bearing the brunt of the losses.

Vladimir Putin trips over carpet after annual hockey game
Needless to say, if the kids I played against in minor hockey were this bad, I'd be playing for the Montreal Canadiens right now. The Russian leader was part of a team including a number of iconic Russian players including Slava Fetisov and Pavel Bure.

"I love the position we're in", Trump said, adding, "There can be some retaliation, but it can't be very substantial by comparison".

"That's misguided", said Greg Daco, chief U.S. economist at Oxford Economics, on Monday of Trump's notion that United States companies can produce the same products at the same scale as China. It also makes banks' lending less profitable. Utilities were the only sector to notch a gain.

United States stocks moved sharply lower on Wall Street and extended the market's slide into a second week as investors seek shelter from an escalating trade war between the U.S. and China. Mr Trump tweeted shortly before news of the Chinese decision came. The S&P 500 lost 1.67 per cent by mid-morning. "You can't move these goalposts like they're moving them and expect to be respected".

The escalating trade war threatens to spoil an expected earnings recovery in the second half, however.

The political gains from a trade war may evaporate if USA consumers feel the pinch from higher prices on Chinese imports, or if US farmers complain about lost sales as a result of the Chinese tariffs.

Elsewhere in the market, generic drug developers are sinking after many of them were accused of artificially inflating and manipulating prices.

Teva, which was specifically mentioned, sank 16.8%.

Ride-sharing company Uber tumbled another 10.8% on its first full day of trading following its rocky debut on the stock market Friday.

For now, though, allowing stock prices to weaken in exchange for political momentum heading into next year's presidential election may strike the White House as a reasonable trade.