Markets

Looming Trade War Could Hurt US-China Cooperation On North Korea

Looming Trade War Could Hurt US-China Cooperation On North Korea

Analysts warned that the risks are growing of an increasingly damaging clash that will ripple around the globe.

Escalating political rhetoric on trade "will continue to be market negative at least for the next few days as the two countries continue to bare teeth, both for the benefit of domestic audiences and to convince each other of their seriousness and resolve", writes Terry Haines, analyst at Evercore ISI.

Speaking to a gathering of small business owners in Washington, Trump again blasted the North American Free Trade Agreement, saying the USA can no longer afford to be the "stupid country".

Set to an unflattering picture of Trump with his hair flying in the wind, the WeChat account of the ruling Communist Party's People's Daily said China had the confidence and the ability to win the trade battle. Combined, the potential tariffs on Beijing could cover $450 billion - a sum equal to 89 percent of Chinese goods imported to the United States a year ago. China doesn't import enough goods from the U.S.to match the scale of Trump's proposal but could adopt other methods.

U.S. President Donald Trump on Friday announced tariffs on $50 billion of Chinese imports, effective July 6.

World financial markets buckled after President Donald Trump ratcheted up the tensions by proposing a fresh batch of tariffs on Chinese products.

Underscoring the impact on Chinese companies from worsening Sino-U.S. relations, shares of ZTE Corp, the technology firm caught in the cross-fire of a trade spat between the two countries, slumped further on Tuesday.

The Trump tariffs, which the U.S. government says are punishment for intellectual property theft, will be enacted in two waves.

"Canada is not going to take advantage of the United States any longer".

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", Trump said in a White House statement. Weaker Chinese growth will have repercussions for big trading partners, such as the United States and Europe, and for global companies who do business there.




Shanghai stocks staged a modest 0.3 percent recovery after tumbling almost 4 percent on Tuesday to a two-year low, buoyed by soothing comments from the central bank chief and in state media, and a burst of share purchase plans.

The Dow Jones Industrial Average fell 103.01 points, or 0.41 percent, to 24,987.47, the S&P 500 lost 5.8 points, or 0.21 percent, to 2,773.87 and the Nasdaq Composite added 0.65 point, or 0.01 percent, to 7,747.03.

US crude rose 1.11 percent to $65.78 per barrel after hitting a two-month low of $63.59 and Brent was last at $75.26, up 2.48 percent on the day after falling to a six-week low of $72.45.

"Such practice of imposing extreme pressure and blackmailing is contrary to the consensus the two sides have reached through rounds of consultations, and disappoints the global community", the spokesperson said.

"If the US becomes irrational and issues this list, China will have no choice but to adopt strong countermeasures of the same amount and quality", the Chinese statement added, according to the AP.

Beijing immediately retaliated by matching the United States levy, but Mr Trump asked officials on Monday to identify $200bn of Chinese goods to be subject to a 10% tariff.

Time is running out for Beijing to fulfil its reform promises if it hopes to maintain stable growth, a top European business lobby said on Wednesday, contending that the roots of U.S.

Stocks are trading lower at midday Tuesday on fresh worries about a trade dispute between the US and China, although they've recovered somewhat from an early slump.

The tariffs would start to slow US growth, economists warn.