World Stocks Plunge on Concerns Over US-China Trade Relations
- Author: Darren Santiago Dec 07, 2018,
Dec 07, 2018, 0:24
Wall Street fell off a cliff yesterday, losing 3% or more of its value after president Donald Trump confirmed nothing much had changed following his meeting with Chinese president Xi Jinping on December 1.
The stock markets are closed Wednesday in honor of a memorial service for the late President George H.W. Bush.
Senior US and EU officials blamed each other on Wednesday (17 October) for a lack of progress in ongoing trade talks, reviving the possibility of fresh tariffs on European cars, said the American representatives.
Referring to himself as a "Tariff Man", Trump, in a series of tweets, deepened the murkiness surrounding the trade agreement, while members of his economic team talked down the prospects of a broad deal. "But if not remember".
"President Xi and I want this deal to happen, and it probably will", Trump said in a post on Twitter.
Beijing is to start quickly implementing specific items where there is consensus with the United States and push forward on trade negotiations within the 90-day "timetable and road map", the Chinese Ministry of Commerce said in a statement yesterday morning.
United States liquefied natural gas was also absent from China's shopping list in October, following Beijing's move in September to impose a retaliatory 10 per cent tariff on USA supplies. Even if the tariffs are lifted now, the United States crop is becoming less competitive in the Chinese market as the harvest season approaches in South America.
Trump and Xi agreement buys time in trade war
If the two sides can not reach agreement over these matters within the next 90 days, the United States will raise tariffs. USA markets soared on news of the detente with the Dow rising more than 400 points in Monday morning trading.
In his tweets, the president said his advisors will work on "seeing whether or not a REAL deal with China is actually possible".
A Chinese official told Reuters that officials were "waiting for the leaders to return" before publicizing details. China has imposed duties on about $110 billion in USA products. A new USA law, signed by Trump in August, FIRRMA, mandates that the United States conduct a "more robust global outreach effort" to persuade allies to adopt stronger protections against Chinese attempts to buy or steal Western technology.
But as part of the truce agreed to by Mr Xi and Mr Trump, the U.S. will not raise tariffs further on Jan 1, so further talks can take place.
"Free trade has made the success story of BMW in the U.S. possible", the company said in a statement Tuesday, adding that 70 percent of the cars made in Spartanburg previous year were exported to more than 120 countries.
"We are no longer in the same buoyant economic or markets environment that we enjoyed earlier this year when threats of tariffs against China were first made", she said.
"China will start from agricultural products, autos and energy to immediately implement specific items that China and the USA have agreed upon", Ministry of Commerce Spokesman Gao Feng told reporters in Beijing.
The US expects China to take immediate action to cut tariffs on US vehicle imports and end intellectual property theft and forced technology transfers as the two countries move toward a broader trade deal, Kudlow, director of the White House National Economic Council, said Monday.
However, it was unclear if this meant China would scrap the retaliatory tariffs on these items-currently at 25 percent for soybeans, and 10 percent for LNG.