Published: Wed, June 20, 2018
Business | By Kate Woods

Stock futures trade higher following Tuesday’s plunge


That response prompted President Trump to threaten an additional $200 billion of tariffs. A counter punch was swift in coming, with a statement from Beijing on Friday night that it would "strike back forcefully".

Michael Enzi, the U.S. senator for the coal and oil producing state of Wyoming wanted the administration to be "wary of how these retaliatory measures from China could seriously impact the industry", spokesman Max D'Onofrio said on Monday.

It gave no details.

Trump announced on Monday evening that he'd asked U.S. Trade Representative Robert Lighthizer to draw up a list of $200 billion in Chinese imports that the U.S. could impose a 10 percent tariff on.

Asian stock markets fell following Trump's announcement.

The broad-based S&P 500 shed 11.17 points (0.40 per cent) to 2,762.58, while the tech-rich Nasdaq Composite Index lost 21.44 points (0.28 per cent) at 7,725.59.

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Trump recently ordered tariffs on $50bn in Chinese goods in retaliation for what he claimed is theft of intellectual property.

Zhang said a trade war may put U.S. multinationals in danger, since multinationals accounted for one-fifth of total employment in the US.

For example, if Trump were to enact proposed tariffs on foreign cars, automakers like Ford and GM could also raise their prices.

This possible trade war now is threading to create more pressure on the Chinese economy. -Chinese trade means Beijing doesn't import enough American goods to match Trump's latest threat.

"The trade relationship between the United States and China must be much more equitable", the president said in explaining his decision.

"A lot of manufacturers built up capacity in other regions, primarily in Southeast Asia, basically so they could avoid importing cells and modules from China specifically", said MJ Shiao, head of Americas at GTM Research. That's 90 percent of everything China exports to the US, from electronics, clothing, toys, tools, you name it.

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But just because Beijing can't retaliate reciprocally, doesn't mean it can't hit back proportionately: China can still disrupt USA supply chains by freezing activities at select ports, or decline to approve acquisitions sought by American companies.

Economists warn Washington might be undercutting its negotiating position by alienating potential allies.

Gary Evans, chief executive of shale producer Energy Hunter Resources, called the tariffs "a lot of sabre rattling" that would not hurt exports of USA crude oil or liquefied natural gas, the latter a fuel that China has not included on its list of products facing a tariff. The Shanghai Stock Exchange saw stocks plunging by 3.8 per cent. Frankfurt was the heaviest faller among leading European indices, shedding 1.4 per cent in late morning deals. "But the United States will no longer be taken advantage of on trade by China and other countries in the world".

Combining trade and foreign direct investment, the United States actually ran a surplus against China. "The tariffs to get common items back into Canada are so high, that they have to smuggle them in", Trump said.

The New York Times reported that Mr Trump told Apple that the United States would not place tariffs on iPhones, although Mr Peter Navarro, the president's top trade adviser, said he was unaware of any such exemption. He'll learn, he can't do that, ' Trump said.

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