Published: Sat, April 07, 2018
Money | By Hannah Jacobs

Markets fall on trade war fears

Markets fall on trade war fears

The broad-based S&P 500 gained 1.2% to 2 644.69, while the tech-rich Nasdaq Composite Index jumped 1.5% to 7 042.11.

Boeing and Caterpillar - among the firms that investors expect to be most affected by the plans for tariffs - were among the biggest losers on the Dow, starting the day more than 3 percent lower. Markets in mainland China and Hong Kong were closed for holidays.

The retaliatory tariffs have left Republican lawmakers from Western and Midwestern states fearful of a big hit to USA farming exporters.

A United States trade official said Wednesday that the administration was moved by concerns that China is increasing its use of unfair trade practices, expanding them from industries such as steel to high-tech industries where United States companies dominate.

Trump denied there's any war in an early morning tweet.

"It must be said, we have been forced into taking this action", said Wang Shouwen, China's deputy commerce minister.

According to the BBC, the most important risk is that tariffs and impositions escalate to the point of unleashing "political tensions between both countries". USTR's proposed list will be open for public comment during the review process, which won't be completed until May.

The U.S. side published the list in disregard of the mutually-beneficial and win-win nature of the China-U.S. commercial cooperation in the past 40 years, the appeal of the Chinese and American business communities and the interests of consumers, it said.

According to the official the United States made "real efforts" to give China every chance to change its ways and engage in talks with America to help address its concerns.

Unbeknownst to Trump, the tariffs are going to hurt his own heartland the most.

United States orange juice, certain sorghum products, cotton and some types of wheat, as well as trucks, some SUVs and certain electric vehicles, will also be subject to the new duties, the ministry said.

In response to Trump's ramped up threat today, China said it will fight back "at any cost". China said it too is moving slowly.

There is never a good time to start a trade war.

"Within 24 hours of the US publishing its list, China drew its sword, and with the same strength and to the same scale, counterattacked quickly, fiercely and with determination", the paper said in a commentary on Thursday.

Neither set of tariffs goes into effect immediately.

"When they joined, the WTO was actually insisting that we treat them as a market economy for purposes of anti-dumping laws even though they're not a market economy", the official said. Garcia Herrero points out that the USA national strategy document released a year ago designated China as a "strategic competitor".

"It wouldn't be surprising at all if the net outcome of all this is some sort of a negotiation", he said.

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