Tag: china

Cryptocurrency miner Canaan eyes IPO; bets on China’s push for chip industry

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Canaan Creative, one of the world’s top cryptocurrency mining equipment makers, said it was considering an initial public offering and expected China’s push to promote the domestic chip industry to help drive growth for the company.

Hangzhou-based Canaan has seen a surge in demand for its mining machines amid a boom in cryptocurrencies, with bitcoin spiking more than 1,300% in 2017. The price of the digital currency has, however, halved so far in 2018.

Canaan shrugged off the recent volatility stemming from growing scrutiny of the sector, betting lower prices would bring in more demand. The company says it supplies around a quarter of the global bitcoin blockchain computing power.

Canaan is considering an IPO in Hong Kong or the United States, co-chairman Jianping Kong said in an interview.

“We … prefer listing outside mainland China as we are in a global business,” Kong said, without giving details on when or how much it expects to raise.

The company had in 2016 tried to list on the mainland through a 3.06 billion yuan ($485 million) back-door listing, but cancelled the plan after a regulatory deadlock. It also scrapped another plan to list on the New Third Board in China, Kong confirmed on Friday.

Kong said the decision was not driven by China’s regulatory crackdown on bitcoin, but because listing in the country takes too long, adding Canaan may consider a secondary mainland listing by issuing depository receipts.

“As an integrated circuit company, we are supported by government policies,” he said.

China’s semiconductor push 

China has introduced tax breaks for chipmakers producing in the country in a bid to cut dependence on foreign manufacturers as trade tensions with the United States soar.

This bodes well for makers of high-end chips used in cryptocurrency mining as China is also home to one of the world’s largest centres for such mining —where people solve complex mathematical puzzles with computers in order to be awarded virtual coins.

While cryptocurrency trading has come under scrutiny in China amid worries of financial risks, an underground ecosystem of peer-to-peer platforms has sprung up to allow bitcoin trading to thrive.

Canaan’s clients include individuals in China and companies outside the country, with many of its machines ending up in electricity-rich areas that have formed large bitcoin mines, such as Xinjiang, Inner Mongolia, Sichuan and Yunnan.

N G Zhang, the company’s 35-year-old founder and CEO, said Canaan employs around 200 in Beijing and Hangzhou, mostly in chip research and development, and is hiring more.

Canaan, which sells “Avalon” mining machines with customised super-fast ASIC chips, made revenue of more than 1 billion yuan in 2017.

Its main competitors include US-based Bitfury and Beijing-based Bitmain, which makes the “AntMiner”.

Canaan is now looking to add more products to its portfolio, such as home appliances with blockchain computing power and AI functions like “coin-mining TVs” that mine cryptocurrencies “while you sleep”, Kong said.

Canaan is developing its own AI chips and planning to launch equipment to mine other cryptocurrencies such as litecoin.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US-Sino trade war boost fund flows to ‘Treasury Island’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Rising trade tensions between the United States and China have sparked equity outflows over the last week, though so far there has only been a modest unwind of 2018’s most popular trades, fund flows data show.

A weekly data compilation by Bank of America Merrill Lynch (BAML) showed the third straight week of equity outflows, with redemptions of $7.2 billion, according to a note received on Friday. Bonds on the other hand recorded the biggest inflows in 12 weeks at $8.1 billion, while gold attracted $1.1 billion.

“Off to Treasury Island to flee stormy China-US weather,” BAML titled its weekly note, adding that U.S. Treasuries had seen their biggest inflows since January 2016 at $4 billion.

“(This) shows investors positioning for lower yields; BAML private client debt allocation is up to 23.3 percent…Treasury inflows are the most visible expression of positioning for risk-off to date.”

Global markets have been on a roller-coaster in recent days after US President Donald Trump ratcheted up pressure on China, stoking fears the world’s two largest economies could be headed for an all-out trade war.

In his latest salvo, Trump said late on Thursday he had instructed US trade officials to consider $100 billion in additional tariffs on China. Beijing warned early on Friday it would fight back “at any cost” with fresh measures to safeguard its interests.

Yet the ups and downs this week suggest investors are not yet convinced the dispute will mushroom into a full-blown trade war that threatens global economic growth.

Emerging markets still enjoyed inflows into debt and equity funds of $5.4 billion, with cumulative emerging market inflows now at an all-time high of $363 billion.

“(The) inability of (US 10-year Treasuries) to break 3 percent and stubborn US dollar weakness helps explain emerging market resilience to rising trade war concerns,” BAML concluded.

Looking at the year’s most crowded trades – betting on short volatility and US Treasuries and a rise in tech and bank stocks as well as large and mid-cap firms across wider developed market – showed a “modest unwind”, BAML found.

Tech stocks – which had driven much of the global equity rally in recent months before taking a hefty beating in the past weeks – suffered some outflows. Yet it is far from capitulation, BAML said, noting redemptions from tech of $300 million and consumer funds at $1.1 billion looked “very modest relative to combined $20 billion inflows past six months”.

BAML also predicted the second quarter “pain trade” – or unexpected turn in the market that could catch most investors flat-footed – could be to short emerging markets and long U.S. dollar.

For the dollar index to break decisively above 91, wages needed to surge or average hourly earnings to rise than 0.4%, BAML said.

March data, due on Friday, were expected to show U.S. non-farm payroll growth of 193,000 jobs versus 313,000 the previous month with average hourly earnings expected to increase 0.2%, according to a Thomson Reuters poll.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Trade war fears already hurting the economy, says European Central Bank’s Benoit Coeure

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A trade war triggered by U.S. tariffs would cause a global recession – and the mere fear of one is already hurting the economy, European Central Bank board member Benoit Coeure said.

Investors have been wondering whether an economic slowdown, aggravated if not caused by global trade tensions, could delay the end of the ECB’s exit from its aggressive monetary stimulus, aimed at boosting inflation in the euro zone.

Coeure said the prospect of a trade war was not being discussed by the ECB and its effects on inflation would only become visible in the long term.

But he added that expectations of escalating tit-for-tat trade actions between the United States and their partners were already hurting borrowers and investors.

“Falls in equity prices in response to the U.S. announcement to impose a tariff on steel and aluminium, and prevailing uncertainty on the scope of any retaliatory measures, have already contributed to tighter financial conditions,” Coeure said at an event in Cernobbio, Italy.

Citing an ECB simulation, he said a 10 percent tariff on all U.S. imports and exports would cause the global economy to shrink by 1 percent in the first year, with the United States among the worst hit and the euro zone suffering a less severe decline.

With euro zone inflation hovering just below 1.5 percent, the ECB is widely expected to wind down its 2.55 trillion-euro bond-buying programme this year and raise interest rates in mid-2019.

But declines in stocks and weaker economic data, including some surveys of euro zone activity, have got some investors wondering whether Frankfurt will stick to this path.

Coeure said trade wars were not part of the ECB’s policy deliberations and reaffirmed the bank’s message that its policy stance will remain easy.

“That is not a discussion that we are having today,” Benoit Coeure told CNBC Television when asked whether the ECB would act in anticipation of a trade war.

“There is very broad agreement in the Governing Council of the ECB that the high degree of accommodation will remain needed, and that (is) irrespective of a trade war,” he added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China says will fight back “at any cost” against U.S. trade tariffs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China warned it would fight back “at any cost” with fresh measures to safeguard its interests if the United States sticks to its protectionist actions, after President Donald Trump threatened an extra $100 billion in tariffs in a worsening trade dispute between the world’s two biggest economies.

Responding to Trump’s comments, the commerce ministry on Friday reiterated in a statement that China was not afraid of a trade war even though it did not seek one, and said the conflict had been provoked by the United States.

“If the United States disregards the objections of China and the international community and persists in unilateralism and trade protectionism, the Chinese side will follow through to the end, at any cost, and definitely fight back resolutely,” a spokesperson was quoted as saying in the statement posted on the ministry’s website.

The Chinese foreign ministry issued an identical statement, which added that Beijing will continue to monitor tariff moves from the United States.

Chinese state media had earlier on Friday slammed Trump’s threat of more trade action as “ridiculous” after the U.S. President had directed trade officials to identify tariffs on $100 billion more Chinese imports, escalating an already high-stakes trade dispute between the two nations.

“This latest intimidation reflects the deep arrogance of some American elites in their attitude towards China,” the state-run Global Times said in an editorial.

Analysts at Oxford Economics warned that a full-blown trade war will have damaging consequences.

“Importantly, these threatened tariffs will be subject to negotiation, and therefore shouldn’t be considered as final,” the analysts wrote in a note to client.

“A (full blown) trade war meanwhile would have a more pronounced effect. The US and China would suffer significant slowdown in real GDP growth – a cumulative loss around 1.0 percentage point,” and cut global economic growth to 2.5% in 2019 from 3.0% in Oxford’s baseline scenario.

The escalating tit-for-tat trade actions between the two economic superpowers have roiled global financial markets, as investors worried about the impact on world trade and growth, hitting equities, the dollar and a range of riskier assets such as copper and boosting safe-havens such as the Japanese yen and gold.

The dollar fell in Friday’s trade,while U.S. stock futures and most of Asia’s stock markets were in the red. [MKTS/GLOB]

Trump said in a White House statement that the new tariffs were being considered “in light of China’s unfair retaliation” against earlier U.S. trade actions, which included a proposed $50 billion of tariffs on Chinese goods.

“This is what a trade war looks like, and what we have warned against from the start,” said National Retail Federation President and CEO Matthew Shay.

“We are on a dangerous downward spiral and American families will be on the losing end,” Shay added in a statement, urging Trump “to stop playing a game of chicken with the U.S. economy.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Trump proposes $100 billion in new tariffs on Chinese goods

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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President Donald Trump instructed the U.S. trade representative to consider slapping an additional $100 billion in tariffs on Chinese goods on Thursday in a dramatic escalation of the trade dispute between the two countries.

Trump’s surprise move came a day after Beijing announced plans to tax $50 billion in American products, including soybeans and small aircraft, in response to a U.S. move this week to slap tariffs on $50 billion in Chinese imports.

And it intensified what was already shaping up to be the biggest trade battle since World War II. Global financial markets had fallen sharply as the world’s two biggest economies squared off over Beijing’s aggressive trade tactics. But they had calmed down Wednesday and Thursday on hopes the U.S. and China would find a diplomatic solution.

Instead, the White House announced after the markets closed Thursday that Trump had instructed the Office of the United States Trade Representative to consider whether $100 billion of additional tariffs would be appropriate and, if so, to identify which products they should apply to. He’s also instructed his secretary of agriculture “to implement a plan to protect our farmers and agricultural interests.”

“China’s illicit trade practices — ignored for years by Washington — have destroyed thousands of American factories and millions of American jobs,” Trump said in a statement announcing the decision.

The latest escalation comes after the U.S. on Tuesday said it would impose 25 percent duties on $50 billion of imports from China, and China quickly retaliated by listing $50 billion of products that it could hit with its own 25 percent tariffs. The Chinese list Wednesday included soybeans, the biggest U.S. export to China, and aircraft up to 45 tons (41 metric tons) in weight. Also on the list were American beef, whiskey, passenger vehicles and industrial chemicals.

Earlier in the week, Beijing announced separate import duties on $3 billion of U.S. goods in response to the Trump administration’s duties on all steel and aluminum imports, including from China.

U.S. officials have sought to downplay the threat of a broader trade dispute, saying a negotiated outcome is still possible. But economists warn that the tit-for-tat moves bear the hallmarks of a classic trade rift that could escalate. And already, tensions between the world’s two biggest economies have rattled global stock markets.

U.S. Trade Representative Robert Lighthizer called China’s moved “unjustified” and said Trump’s proposal was an “appropriate response to China’s recent threat of new tariffs.”

“Such measures would undoubtedly cause further harm to American workers, farmers, and businesses,” he said in a statement. “Under these circumstances, the President is right to ask for additional appropriate action to obtain the elimination of the unfair acts, policies, and practices identified in USTR’s report.”

The clash reflects the tension between Trump’s promises to narrow a U.S. trade deficit with China that stood at $375.2 billion in goods last year and China’s ruling Communist Party’s development ambitions. Trump says China’s trade practices have caused American factories to close and lead to the loss of American jobs.

Trump’s top economic adviser, Larry Kudlow, said earlier Thursday in an interview with Fox Business Network that negotiations were ongoing. But, he said, “at the end of the day, China’s unfair and illegal trading actions are damaging to economic growth, for the U.S., for China and for the rest of the world.”

He also called Trump “the first guy with a backbone in decades … to actually go after it. Not just whisper it, but to go after it with at least preliminary actions.”

But Sen. Ben Sasse, R-Neb., a frequent Trump critic, called the escalation “the dumbest possible way” to punish China.

“Hopefully the President is just blowing off steam again but, if he’s even half-serious, this is nuts,” Sasse said in a statement. “Let’s absolutely take on Chinese bad behavior, but with a plan that punishes them instead of us.”

Any additional tariffs would be subject to a public comment process and would not go into effect until that process is complete.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold prices fall as US-China trade tensions ease

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices fell on Thursday after the United States and China signalled willingness to resolve a trade dispute through negotiations, reducing demand for bullion as a perceived safe place to park money.

Investors moved back into equities, sending global stock markets higher, while the dollar strengthened, making gold more expensive for users of other currencies.

“It’s been a double whammy (for gold),” said Fawad Razaqzada, an analyst at FOREX.com. “Stock markets have stabilised, at least for the time being, and that has reduced demand for safe havens.”

The slide in gold prices had also created a negative technical picture that encouraged further selling, Razaqzada said.

Spot gold was down 0.5% at $1,326.81 an ounce at 1502 GMT.

US gold futures were 0.7% lower at $1,330.70 an ounce.

Gold had surged to $1,348.06 on Wednesday after Beijing threatened to retaliate against proposed US tariffs on Chinese imports worth around $50 billion with its own duties on US products including soybeans, planes, cars, whiskey and chemicals.

Both Washington and Beijing later said they were willing to negotiate a resolution.

President Donald Trump’s top economic adviser called the announcements by the two countries mere opening proposals and suggested the U.S. tariffs may never go into effect, while China’s ambassador in Washington said Beijing’s preference was to resolve the dispute through talks.

Technical support for gold was now around $1,320 and the 100-day moving average at $1,311, said MKS trader Sam Laughlin.

Gold prices reached an 18-month high of $1,366,07 in January but have since then been locked in a trading range between around $1,310 and $1,360.

Investors were looking to US jobs data on Friday to give new direction to prices. Strong employment and wage growth would encourage the Federal Reserve to raise US interest rates more aggressively and push gold prices lower.

Gold is sensitive to rising rates because they push up bond yields, reducing the attractiveness of non-yielding bullion, and tend to boost the dollar, in which gold is priced.

Trading volumes were likely to be lower however with markets in mainland China, the world’s largest gold consumer, closed on Thursday and Friday for the Tomb Sweeping Day holiday.

In other precious metals, spot silver was up 0.3% at $16.33 an ounce.

Platinum was 0.3% higher at $915.10 an ounce after touching $901.50, its lowest since December.

Palladium was down 1% at $915.70 an ounce after hitting a new six-month low at $907.22.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Facebook, Amazon buoy Wall Street as trade concerns cool

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Facebook, Amazon and industrial stocks helped Wall Street extend its recovery on Thursday as fears over a trade war between the United States and China eased.

Technology stocks, which have taken a beating in the past three weeks, were higher.

Facebook, Amazon, Alphabet, Netflix — collectively known as the “FANG” group — were up between 0.8% and 2.6 %.

Shares of Boeing, Caterpillar — hit the most on Wednesday after China retaliated with $50 billion in tariffs on US goods such as soybeans, autos, chemicals and some types of aircraft — also rose more than 1%.

In the opening hour, the Dow Jones Industrial Average was up 0.57% at 24,403.74. The S&P 500 rose 0.37%  to 2,654.55 and the Nasdaq Composite gained 0.55% to 7,080.71.

The Dow bounced back from a 500 point drop on Wednesday after President Donald Trump’s top economic adviser Larry Kudlow said the administration was involved in a “negotiation” with China rather than a trade war.

“The bounce on Wednesday was really quite impressive, especially as there was not much of a catalyst for the turnaround given that neither the US or China is backing down on tariffs and negotiations were always going to take place in the background,” Craig Erlam, senior market analyst at Oanda said in a note.

Investors also took comfort from the fact that the effective date of China’s move depended on when the US action took effect, providing room for maneuver.

Economic data on Thursday showed that the US trade deficit increased to a near 9-1/2-year high in February, but the shortfall with China narrowed sharply.

While exports to China were unchanged in February, imports from the country declined 14.7%.

Facebook shares were up about 3% after Chief Executive Mark Zuckerberg said the company had not seen “any meaningful impact” on usage or ad sales since the data privacy scandal.

Wells Fargo rose 1% and Citigroup gained 1.5% following upgrades by UBS.

Advanced Micro Devices jumped 3.4% after Stifel upgraded to “buy”, while Micron Technology fell 3.7% after UBS started with a “sell” rating.

Advancing issues outnumbered decliners on the NYSE for a 2.25-to-1 ratio and for a 2.01-to-1 ratio on the Nasdaq

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China seeks WTO dispute resolution with US over steel, aluminum tariffs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China’s commerce ministry said on Thursday it has initiated a World Trade Organisation (WTO) dispute resolution procedure over US tariffs on its import of steel and aluminum.

The move follows a back and forth dispute between the two countries over free trade, that has escalated from an investigation by the United States into China’s intellectual property practices to imposing tariffs on imports.

The Ministry of Commerce said the US measures against its steel and aluminum were not for maintaining national security, but rather were in aid of trade protectionism.

The ministry said in a statement posted on its website the US action were a “serious violation of the non-discrimination principle of the multilateral trading system”, and violated its tariff-reduction commitments under the WTO.

After the United States failed to negotiate compensation, China had to initiate the dispute settlement procedure to defend its rights and interests, the ministry said.

The US Trade Representative’s office said earlier that the tariffs were put in place on national security grounds and objections were “baseless”.

WTO rules include an exemption for measures related to national security.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

On the brink: US and China threaten tariffs as fears rise

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The world’s two biggest economies stand at the edge of the most perilous trade conflict since World War II. Yet there’s still time to pull back from the brink.

Financial markets bounced up and down Wednesday over the brewing U.S.-China trade war after Beijing and Washington proposed tariffs on $50 billion worth of each other’s products in a battle over the aggressive tactics China employs to develop its high-tech industries.

“The risks of escalation are clear,” Adam Slater, global economist at Oxford Economics, wrote in a research note. “Threats to the U.S.-China relationship are the most dangerous for global growth.”

There’s time for the two countries to resolve the dispute through negotiations in the coming weeks. The United States will not tax 1,300 Chinese imports — from hearing aids to flamethrowers — until it has spent weeks collecting public comments. It’s likely to get an earful from American farmers and businesses that want to avoid a trade war at all costs.

Also, China did not say when it would impose tariffs on 106 U.S. products, including soybeans and small aircraft, and it announced it is challenging America’s import duties at the World Trade Organization.

Lawrence Kudlow, the top White House economic adviser, sought to ease fears of a deepening trade conflict with China, telling reporters that the tariffs the U.S. announced Tuesday are “potentially” just a negotiating ploy.

“We’re very lucky that we have the best negotiator at the table in the president, and we’re going to go through that process,” said White House press secretary Sarah Huckabee Sanders. “It will be a couple months before tariffs on either side would go into effect and be implemented, and we’re hopeful that China will do the right thing.”

The prospect of a negotiated end to the dispute calmed nerves on Wall Street. After plunging in early trading, the Dow Jones industrial average ended up rising 231 points, or nearly 1 percent, to 24,264.

The sanctions standoff started last month when the United States slapped tariffs on imported steel and aluminum. On Monday, China countered by announcing tariffs on $3 billion worth of U.S. products. The next day, the United States proposed the $50 billion in duties on Chinese imports, and Beijing lashed back within hours with a threat of further tariffs of its own.

Things could easily escalate. The U.S. Treasury is working on plans to restrict Chinese technology investments in the United States. And there’s talk that the U.S. could also put limits on visas for Chinese who want to visit or study in this country.

For its part, China conspicuously left large aircraft off its sanctions list Wednesday, suggesting it is reserving the option to target Boeing if relations deteriorate further.

Douglas Irwin, a Dartmouth College economist who has just written a history of U.S. trade policy, said the tit-for-tat tariffs are shaping up as the biggest trade battle since World War II.

“It’s huge,” he said.

In 1987, the Reagan administration triggered shockwaves by slapping tariffs on just $300 million worth of Japanese imports — that’s million with an “m” — in a dispute over the semiconductor industry. Those tariffs covered less than 1 percent of Japanese imports at the time.

The tariffs the U.S. unveiled Tuesday apply to nearly 10 percent of Chinese goods imports of $506 billion.

And during the dispute three decades ago, Japan, a close U.S. ally, chose not to retaliate. It eventually gave in to U.S. demands.

“What we’ve seen with China is very different,” Irwin said. “When the steel tariffs went in — boom, they came back with retaliation. … They were not going to take it lying down.”

Making matters trickier, the dispute over Chinese technology policy strikes at the heart of Beijing’s ambitions to become the global leader in cutting-edge technologies like artificial intelligence and quantum computing.

In August, President Donald Trump ordered the Office of the U.S. Trade Representative to investigate China’s tech policies, particularly longstanding allegations that it coerces U.S. companies into handing over sensitive technology to gain access to the Chinese market. The tariffs proposed Tuesday were the result of that investigation.

The U.S. also accuses China of treating U.S. companies unfairly when they try to do business there and of encouraging Chinese hackers to break into U.S. corporate computer systems and steal trade secrets.

The Trump administration is coming under intense pressure to de-escalate the dispute. American farmers, who disproportionately supported Trump in the 2016 election, are especially outspoken in seeking trade peace. After all, China buys nearly 60 percent of American soybean exports.

“American farmers are waking up this morning to the prospect of a 25 percent tax on exports that help sustain their farming operations,” said former U.S. Sen. Max Baucus, co-chair of Farmers for Free Trade. “We urge the administration to reconsider escalating this trade war.”

Some analysts predict Beijing will ultimately yield to U.S. demands because it relies far more heavily on the U.S. market than American businesses rely on China’s.

“It is no coincidence that the Chinese have not yet set the date when these new tariffs will become effective,” said Raoul Leering, head of international trade analysis at ING. “It is likely that China will, in the end, cut its losses and be willing to give Trump something.”

But Robert Holleyman, a former U.S. trade official, said he worries that both sides will impose tariffs — and they will stick indefinitely.

“That would hit American consumers in the pocketbook and would reduce access by American businesses and farmers to the largest market in the world,” he said.

And the Eurasia Group consulting firm warned in a research note about fear that the dispute “could spiral dangerously out of control, given that this trade action is really less about trade and more about China’s rise as a technology leader.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Boeing, Apple lead slide as China-U.S. trade spat intensifies

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Boeing and Apple led a slide in big U.S. manufacturers and technology companies on Wednesday, bearing the brunt of a deepening trade conflict between China and the United States.
China and the United States announced tariffs on $50 billion of each others` imports. But, while Washington`s list covers many obscure industrial items, Beijing`s covers 106 key U.S. imports including soybeans, planes, cars, and chemicals.
The speed with which the trade struggle between the two countries is ratcheting up – China took less than 11 hours to respond with its own measures – led to a sharp selloff in global stock markets and commodities.
At 9:44 a.m. ET, the Dow Jones Industrial Average was down 399.81 points, or 1.66 percent, at 23,633.55. The S&P 500 fell 28.57 points, or 1.1 percent, at 2,585.88 and the Nasdaq Composite was down 75.51 points, or 1.09 percent, at 6,865.77.
The S&P opened and stayed below its 200-day moving average, a key support level watched by traders technical analysts, while the Dow held just above that mark. The Nasdaq dipped into negative territory for the year.
“Tariffs by themselves and an escalating trade war would certainly have deleterious effects on just about everything,” said Jack Ablin, chief investment officer at Cresset Wealth in Chicago.
The declines were broad based. All 30 Dow components were lower. About 469 of the S&P 500 components were lower. The industrials index`s 1.8 percent slide was the most among the 11 major S&P sectors, as has been the case since the trade war fears surfaced.
Shares of Boeing, the single largest U.S. exporter to China, tumbled 4 percent. Caterpillar fell 3 percent.
Ford, General Motors, Fiat Chrysler and Tesla fell between 0.8 percent and 1.88 percent.
While manufacturers were the bigger losers as a group, the technology sector`s 1.74 percent drop weighed the most on the market.
Major tech names Apple and the FANG group – Facebook, Amazon, Netflix and Alphabet were down between 1.4 percent and 2.6 percent.
Chipmakers, many of which have the highest revenue exposure to China among S&P 500 companies, also fell. All components of the Philadelphia chipmakers index were lower, led by AMD`s 5 percent drop.
“As a sector, technology has the most to lose from a world in which global trade is restricted and of course, some of the subjects of the tariffs, will also be hit,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
Among the few bright spots was Lennar, whose shares jumped 6.2 percent after the homebuilder`s quarterly revenue beat estimates as it sold more homes at higher prices.
Declining issues outnumbered advancers by a 9.42-to-1 ratio on the NYSE and a 5.74-to-1 ratio on the Nasdaq.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow