Tag: trade war

US criticises China over imposition of tariffs on 128 products

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

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The United States has blasted as “unfair” the Chinese tariffs imposed on 128 US imports worth $3 billion, including fruit and pork, in the latest tit-for-tat over US duties on steel and aluminium.

China’s action, which was decided by the customs tariff commission of the State Council, followed weeks of rhetoric that has raised fears of a trade war between the world’s two biggest economies.

President Donald Trump’s administration had said its duties were aimed at steel and aluminium imports that it deemed a threat to US national security, but China’s Commerce Ministry called that reasoning an “abuse” of World Trade Organization (WTO) guidelines.

The US measures “are directed only at a few countries, seriously violating the principle of non-discrimination as a cornerstone of the multilateral trading system, which seriously infringed the interests of the Chinese side,” said a statement on the Commerce Ministry website.

Trump has repeatedly railed against China’s massive trade surplus with the United States and promised during the election campaign to take steps to slash the US deficit.

His White House again pointed the finger at Beijing. “China’s subsidisation and continued overcapacity is the root cause” of what deputy White House spokeswoman Lindsay Walters called a crisis affecting steel.

“Instead of targeting fairly traded US exports, China needs to stop its unfair trading practices, which are harming US national security and distorting global markets,” she said.

Beijing had warned last month that it was considering the tariffs of 15 per cent and 25 percent on a range of products that also include wine, nuts and aluminium scrap. They came into force on Monday, Xinhua said, citing a government statement.

The levies are in response to tariffs of 10 percent on aluminium and 25 percent on steel that have also angered US allies.

“We hope that the United States can withdraw measures that violate WTO rules as soon as possible to put trade in the relevant products between China and the US back on a normal track,” the Commerce Ministry statement said.

“Cooperation between China and the United States, the world’s two largest economies, is the only correct choice.”

Trump has temporarily suspended the tariffs for the European Union as well as Argentina, Australia, Brazil, Canada, Mexico and South Korea.

But the White House has unveiled plans to impose new tariffs on about $60 billion of Chinese imports over the “theft” of intellectual property.

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

US stocks rally; Dow surges, clawing back lost ground

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

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News that the U.S. and China are open to negotiating to avert a trade war put investors in a buying mood Monday, giving the market its best day in more than two years and erasing about half of its huge losses last week.

Technology companies accounted for much of the broad rally, which powered the Dow Jones industrial average to a gain of nearly 670 points. Microsoft was the biggest gainer in the 30-company Dow and the Standard & Poor’s 500 index, climbing nearly 8 percent.

Banks also notched solid gains, benefiting from a pickup in bond yields. Retailers, consumer goods companies and health care stocks were among the big gainers.

The market rebound followed the worst week for U.S. stocks in two years as investors traded last week’s jitters for a more optimistic outlook on trade, and an opportunity to buy.

“Certainly nothing’s settled,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “Investors are still viewing this as a glass half-full market and a constructive economy, so it’s not surprising to see them buy on value here, buy on dips to try to rebuild their positions.”

The Standard & Poor’s 500 index rose 70.29 points, or 2.7%, to 2,658.55. The Dow Jones industrial average gained 669.40 points, or 2.8%, to 24,202.60. The Dow lost more than 1,400 points last week and is still down slightly for the year.

The Nasdaq added 227.88 points, or 3.3%, to 7,220.54. The Russell 2000 index of smaller-company stocks picked up 33.63 points, or 2.2%, to 1,543.72.

All told, the Dow, S&P 500 and Nasdaq posted their best one-day gains since August 2015, making up slightly more than half of the market’s losses on Thursday and Friday.

Global stock markets fell sharply last week amid fears of a trade war after President Donald Trump announced duties on $60 billion worth of Chinese goods in a dispute over technology policy. On Friday, Beijing released a $3 billion list of U.S. goods targeted for possible retaliation over an earlier U.S. tariff hike on steel and aluminum imports. That prompted fears the spat might depress trade worldwide and set back the global economic recovery.

Those fears eased Monday, after China’s government said it is open to negotiating with Washington. That announcement followed a news report indicating that U.S. officials have submitted a list of market-opening requests.

A foreign ministry spokeswoman, Hua Chunying, didn’t confirm the report by The Wall Street Journal but said at a regular briefing, “Our door for dialogue and discussion is always open.”

China has yet to say how it might respond to Trump’s tariff proposals. That didn’t appear to dampen investors’ resurgent optimism Monday.

“This declaration of tariffs on the president’s part was his typical opening salvo into a negotiation process,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “He’s done these things in the past, and now it looks like the markets are telling us, ‘Yep, that’s what’s happening.'”

Meanwhile, a top trade negotiator for South Korea said Monday that the nation has agreed to further open its auto market to the United States as the two countries prepare to amend their six-year-old trade agreement.

Technology companies recouped some of the sector’s big losses last week. Microsoft rose $6.60, or 7.6%, to $93.78.

Financial stocks surged as bond yields rose. Higher yields are good for banks, because they drive up interest rates on mortgages and other loans, making them more profitable for lenders. Bank of America added $1.27, or 4.4%, to $30.44.

The yield on the 10-year Treasury rose to 2.85% from 2.81% late Friday.

Lowe’s climbed 6.6% after the home-improvement retailer said Chairman and CEO Robert Niblock is retiring. The stock gained $5.53 to $89.30.

Facebook ended barely higher after erasing an early slide triggered by new questions about collecting phone numbers and text messages from Android devices. The Federal Trade Commission confirmed Monday that it is investigating the social media giant’s privacy practices, including whether the company engaged in “unfair acts” that cause “substantial injury” to consumers. The stock eked out a gain of 67 cents, or 0.4 percent, to $160.06.

Traders also had their eye on the latest corporate deal news Monday.

Finish Line vaulted $3.28, or 31.1%, to $13.83 after the sporting goods retailer agreed to be bought by JD Sports Fashion PLC.

USG Corp. jumped $6.52, or 19.5%, to $40.03 after the building products company rejected an offer worth $42 per share from Knauf.

Benchmark U.S. crude fell 33% to settle at $65.55 per barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, shed 33 cents to close at $70.12 in London.

In other energy futures trading, heating oil was little changed at $2.02 a gallon. Wholesale gasoline lost 2 cents to $2.01 a gallon. Natural gas added 3 cents to $2.62 per 1,000 cubic feet.

Gold rose $5.10 to $1,355 an ounce. Silver gained 10% to $16.68 an ounce. Copper slipped 2 cents to $2.97 a pound.

The dollar rose to 105.22 yen from 104.82 yen on Friday. The euro strengthened to $1.2455 from $1.2367.

In Europe, Germany’s DAX fell 0.8%, while France’s CAC-40 lost 0.6%. Britain’s FTSE 100 shed 0.5%. In Asia, Tokyo’s Nikkei 225 added 0.7%, while Hong Kong’s Hang Seng rose 0.7%. Sydney’s S&P-ASX 200 fell 0.5%. Seoul’s Kospi gained 0.8%. India’s Sensex rose 0.3%.

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

Indian markets may open weak due to staggering trade war fears

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

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The Indian markets may open weak today as the global markets continue to be affected by the trade war buzz.

“Markets have been very off-base with trade war fears,” Financial Major JP Morgan pointed.

The NSE’s 50-share Nifty breached its 10,000 levels and closed at 9,982 points after a volatile session. The BSE’s Sensex witnessed a 400 points drop at Friday’s close. Financials, energy and the auto firms were the major losers today while media and IT stocks had lent support.

The U.S. President Donald Trump set motion a tariff hike of close to $60 billion on China.  The tariff hike came as a measure to ‘penalise’ China after Trump accused China of high-tech thieveries, such as stealing the intellectual property of American companies. China, in retaliation, unveiled higher import duties on 128 U.S. goods including steel pipes, wine and fresh fruits.

Columbia University’s Economics Professor Joseph Stiglitz in an interview with CNBC said that Trump is challenging the ‘rule of law’ and the increase in tariffs would affect the economic growth.

The U.S. market’s index Dow and S&P 500 dropped by 5.7% and 5.9% last week, while Nasdaq pulled back 6.5%. Dow Jones dropped 425 points to close at 23,533 on Friday, its lowest level since November.

The European stocks followed the Wall Street and closed lower on Friday as the fears of trade war escalated while the Singaporean market’s index SGX Nifty is currently trading flat with a negative bias, indicating that the Indian markets may open flat today.

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

Don’t want to call it a trade war but should stay away, says Raghuram Rajan

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

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In his address at Kerala Global Future Summit, Former RBI chief Raghuram Rajan warned that the global economic situations could harm recovery in India and suggested that the country should “stay away”.

However, Rajan refused to term the situation a trade war. “I don’t want to call it a trade war but it’s important that we stay away since it could harm recovery”, he said.

Primed for economic combat, President Donald Trump set in motion tariffs on as much as $60 billion in Chinese imports to the U.S. on Thursday and accused the Chinese of high-tech thievery, picking a fight that could push the global heavyweights into a trade war.

Japan and China, the country’s closest allies, were hit with a separate round of tariffs on as much as $60 billion in imports to the U.S. China threatened retaliation, and Wall Street cringed, recording one of the biggest drops of Trump’s presidency. But he declared the U.S. would emerge “much stronger, much richer.”

Earlier this month, Trump signaled beginning of a global trade war by imposing heavy tariffs on import of steel and aluminium in the US.

Signing two proclamations that levied a 25 per cent tariff on steel and a 10 per cent tariff on aluminium, he claimed that the step was necessary to boost the industry in the country which was suffering from “unfair” business practices.  However, he exempted Canada and Mexico.

His surprising announcements have left other countries worried as it comes as a threat of  a global trade war.

The former RBI chief, in his address also stressed on technology and its fears as well as benefits. Rajan stated that India did not have “time to sit and watch how things evolve”, adding that “we have to move faster than we are moving today if, we have to take the full benefits of a technologically enabled world”.

Talking about the fears revolving around tech, Rajan said “It centre’s around not so much that benefits that technology brings of course, there are concerns about privacy and so on. But the fears largely are around jobs and job loss. Even in the industrial world where education levels are much higher there is a very strong fear that people will not have the incomes to benefit from all the bounty that technology offers.”

(With inputs from AP)

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