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24 Marcha 2018, 11:55 | Dolorita Barahona
US-China Trade War Fears Send Global Stock Markets Into Turmoil
China disclosed its own plans on Friday to impose tariffs on up to $3 billion of US imports in retaliation against USA tariffs on Chinese steel and aluminium products.
Though the European Union has been granted a possible exemption, stock markets across the region have fallen sharply.
The announcement of broader tariffs directed specifically at China sent equities tumbling.
At 9:05 a.m. ET, Dow e-minis were down 18 points, S&P 500 e-minis gained 1.25 points and Nasdaq 100 e-minis dropped 11 points. Hong Kong's Hang Seng closed down 2.5%.
A tit-for-tat escalation of trade retaliation, coupled with Trump's desire to "look tough on China" will make it harder for the two sides to settle their differences, said Eswar Prasad, a professor of trade policy at Cornell University and a former head of the International Monetary Fund's China department.
Senior White House economic advisor Everett Eissenstat said Thursday the new United States import duties would target sectors where "China has sought to acquire an advantage through the unfair acquisition or forced technology transfer from USA companies".
He has signaled an openness to exempting even more countries from the steel and aluminum tariffs, and his administration has yet to announce which Chinese imports will face tariffs (or how high the taxes will be), unleashing a fresh lobbying push. The proposed product list will include goods in the aerospace, information and communication technology and machinery industries.
"One should not rule out that possibility that we are at the start of a long-drawn trade dispute", Pan said.
If Trump unveils yet more punitive measures, Beijing is nearly certain to respond.
Analysts are anxious. China's response Friday was framed as retaliation for steel and aluminum tariffs Trump unveiled earlier in March, not his Thursday broadside.
Copper and iron prices both fell, as investors bet demand for the metals would suffer in a trade war.
"Chinese retaliation against USA wine would put our producers at a significant disadvantage in one of the most important markets in the world at a critical time", said Bobby Koch, CEO of the Wine Institute.
China's commerce ministry said in a statement Thursday that the country "will not sit idly to see its legitimate rights damaged and must take all necessary measures to resolutely defend its legitimate rights". The Bank of England warned Thursday that increased protectionism could have a "significant negative impact" on global growth. Sales of Japanese cars fell precipitously in China in the wake of 2012 tensions over island claims, Riedel indicates, though they recovered a few quarters later.
U.S. officials widely agree that China has stolen United States technology and trade secrets.
For example, when American tech companies want access to China's market, China forces them to enter joint ventures with its own companies, the USTR said.
From hog producers in Iowa to apple growers in Washington state and winemakers in California, farmers expressed deep disappointment Friday over being put in the middle of a potential trade war with China by the president many of them helped elect.
"The Chinese have every incentive to make this sound very extreme and make their reaction sound awful, simply because they want Trump to think he's having an impact". However, they concede they're anxious about retaliation.
He says nuclear option would be to sell a "couple hundred billion" in US Treasuries, which would tank markets and raise US interest rates.
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