USA stocks dip as Trump talks of more tariffs on China

Lloyd Doyle
July 23, 2018

"We suspect the President's comments on USA interest rates and currency markets will nearly likely put an end to the dollar rally", said Viraj Patel, FX strategist at ING in London.

"As usual, not a level playing field", he continued. "We've had a trade war that's been going on for awhile, and now we're starting to hear talk about 'you shouldn't be doing that with your currency".

A top Federal Reserve official, meanwhile, warned the trade war could hurt the USA economy.

"The escalating trade war, if it goes badly, could be a risk for the US economy", Bullard said, adding he understands the policy's objective. They argued that the taxes would raise vehicle prices, squeeze automakers by increasing the cost of imported components and invite retaliation from U.S. trading partners - and allies - like the European Union and Canada. Chinese exports would also be relatively cheaper, possibly balancing out suggested increases in tariffs by the Trump Administration. Stocks were poised to end the week about where they started on Monday. The Dow Jones Industrial Average lost 6.38 points to 25,058.12.

The S&P 500 index dipped 2.66 points, or 0.1 percent, to 2,801.83.

When it comes to the Yuan's downturn against the Dollar, Trump has thus far pointed all fingers at China.

Benchmark 10-year US notes last fell 13/32 in price to yield 2.895 percent, from 2.847 percent late on Thursday.

Part of the reason for the market's relative calm has to do with corporate performance.

China can also undo the impact of the U.S. tariffs by devaluing the yuan by 8 per cent. The market fundamentals of strong earnings and a growing economy have been consistent.

In Canada, the S&P/TSX Composite Index closed down 0.65 per cent to 16,435.46. The company for the first time reported annual sales above $US100 billion.

"In general, there is a slight uneasiness to the market today in the midst of what has been a constructive rally now for most of the year", said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

China will likely retaliate if additional tariffs are imposed, economists note, rather than simply knuckle under.

President Trump said "I'm willing to go to 500", referring roughly to the $505.5-B in goods imported a year ago from China.

US President Donald Trump says he is ready to impose tariffs on all $US500 billion ($673.7 billion) of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets.

"But I don't like all of this work that goes into doing what we're doing", Trump said, arguing that the Fed's hikes could disrupt economic growth. "I'm doing this to do the right thing for our country". United States has now warned about India's trade war against China.

Lin Bokiang, director of the China Center for Energy Economics Research, told the Global Times, "It is very clear that India is trying to imitate Trump by adopting a protectionist policy against China". "Were I Chairman Powell, I would ignore the president and do my job and I am confident he will do just that". Earlier this week, Sen. Rather, he may be prepared to wait as long as he feels it necessary to force other countries to adopt trade rules more favorable to the United States.

Other reports by Iphone Fresh

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