U.S.-China Trade War Giving Untimely Market Shocks
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U.S.-China Trade War Giving Untimely Market Shocks

By IndraStra Global News Team

Image Attribute: Screengrab was taken from footage of American and Chinese Stock  Video (100% Royalty-free) / Source: Shutterstock, ID No: 10693022

Image Attribute: Screengrab was taken from footage of American and Chinese Stock  Video (100% Royalty-free) / Source: Shutterstock, ID No: 10693022 

On May 9, 2019, Asian stock markets are tumbling for the fourth day after a warning from U.S. President Donald Trump that a long-worked-on trade deal with China is in serious danger. Investors remained on the edge ahead of trade talks between the US and China later this week.

While speaking at Make America Great Again rally at Florida State Fairgrounds Expo Hall in Panama City Beach, Florida, the president attributed his recent threat of increased tariffs to Beijing's negotiating position.

"By the way, you see the tariffs we're doing? Because they broke the deal. They broke the deal," Trump said. "So they're flying in, the vice premier tomorrow is flying in — a good man — but they broke the deal. They can't do that, so they'll be paying." He further added, "We won't back down until China stops. The era of economic surrender is over."

It all started on Monday when U.S. Trade Representative Robert Lighthizer accused Beijing of “reneging” on commitments it made in earlier talks. US Treasury Secretary Steven Mnuchin, who briefed reporters with Lighthizer, said that Trump officials learned over the weekend that Chinese officials “were trying to go back on some of the language” that had been negotiated in ten earlier rounds of talks. Lighthizer confirmed Trump's threat that the administration will increase its tariffs on US$ 200 billion worth of Chinese imports early Friday (12:01 am EST) — a sharp escalation in a yearlong trade dispute. However, Lighthizer also assured that for new tariffs, there would be an exclusion process available for the American companies.

Today, Chinese Vice Premier Liu He is heading to Washington for the talks but Trump's insistence that China "broke the deal", and then Beijing's response that it would retaliate against tariffs were "ratcheting up the stakes". Liu, a close adviser and confidant of President Xi Jinping, who also oversees the economy, is Harvard educated and speaks fluent English.

Chinese Foreign Ministry spokesman Geng Shuang told a briefing on Wednesday that working out disagreements over trade was a "process of negotiation" and that China was not "avoiding problems." Analysts believe China will be reluctant to make any serious changes, which could undermine the Communist Party's grip over the country.

According to Charles Hankla, Associate Professor of Political Science, Georgia State University - "Unfortunately, Trump’s policies are only an acceleration of a trend in international trade that’s been going on for several decades. It’s a move away from multilateralism – in which many countries agree on certain trading principles – and toward bilateralism – which pits nation against nation, raising the stakes."


Today, stocks have endured a major sell-off this morning as trade tensions between the US and China have ratcheted up. But, according to Warren Buffet, despite the concerns, it would be "nonsense" for investors to sell stocks based on negative headlines, adding that the United States and China will be the world's superpowers for the next 100 years and will always have tensions. 

  • Futures on the Dow Jones Industrial Average fell about 167 points, indicating a negative open of more than 78 points. Overall, the Dow has fallen nearly 540 points since Trump threatened to raise tariffs on Chinese goods as soon as tomorrow. 
  • China’s CSI 300 index has sunk by 1.8% today after the US Trade Representative’s office have filed the paperwork to hike tariffs on Chinese goods (from tomorrow).
  • South Korea’s Kospi 200 index has slumped by over 3% today.
  • UK's FTSE 100 has lost 2.6%, while the Europe-wide Stoxx 600 has dropped over 3% since May Day.
  • In India, at closing, Sensex was down 0.61% to 37,558.91 points, while the NSE Nifty 50 index declined 0.51% to 301.80 points.
  • Japan’s Nikkei has lost 1%, with Hong Kong’s Hang Seng lost 2%.

This is a developing story. Check back for updates.

With reporting by BBC, CNBC, Fox News, Livemint, and Reuters