LONDON: Equity trading screens were awash in red on Friday after US President Donald Trump stunned investors by slapping new tariffs on China, ratcheted up the trade war between the world’s top two economies.The announcement by Trump on Thursday that Washington would impose 10 per cent in tariffs on another $300 billion in Chinese goods sparked a broad-based sell-off on Wall Street that followed the sun to trading in Asia and Europe on Friday.The announcement means virtually all of the $660 billion in annual trade of goods between the world’s two biggest economies will have tariffs on them, with the new duties set to take effect September 1.The US decision came after trade negotiators held talks in Shanghai this week, the first face-to-face discussions since Trump and Chinese President Xi Jinping agreed to a truce in June, and Trump made clear that the tariffs could go lower or higher depending on what happens with the talks.China warned on Friday it would take “countermeasures” if the US followed through on its threat, with the commerce ministry calling the decision a “serious violation” of the June truce. Negotiators are expected to reconvene in Washington in early September for another round of talks.While Wall Street’s main indices ended the day with losses around one per cent, both Hong Kong and Tokyo fell more than 2 per cent. Europe’s main markets were down similar amounts in midday trade, with Frankfurt briefly tumbling 3 per cent. Investors fleeing stocks sought to put it into safe-haven investments such as bonds, pushing the yield on German government 10-year bonds to a new record low of nearly -0.5 per cent. Yields on British government bonds also plunged despite Brexit risks. Oil prices recovered some ground after suffering a rout Thursday as Trump’s tariffs announcement fuelled concerns about lower demand, sending Brent plunging seven per cent and WTI plummeting 7.9 per cent, its worst decline in a session since February 2015.Meanwhile, Beijing threatened to unleash “countermeasures” against US plans to impose tariffs on $300 billion in Chinese goods. “China expresses its strong dissatisfaction and resolute opposition to this,” foreign ministry spokeswoman Hua Chunying said at a regular press briefing.“If the US implements the tariff measures, China will have to take necessary counter-measures to resolutely defend the core interests of the country and its people,” Hua said, adding Beijing did not want a trade war “but is not afraid to fight one if necessary”. She did not specify what kind of measures China would take, but in the past Beijing has hinted that it could restrict exports of rare earths that are vital to the US technology industry.
08-03-2019, 05:48 PM
Trump slaps new trade tariffs on China
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