Trump threatens to impose new tariffs on China

Gladys Abbott
November 1, 2018

Trump also said he believed "a great deal" on trade can be agreed with China, but warned about new tariffs if the deal is not struck. The sources stressed however that the new tariffs have not yet been finalised. That was right before the market hit its lowest point during the 2008-09 financial crisis.

Washington is reported to be preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between Mr Trump and his counterpart Xi Jinping fail to ease the trade war.

The United States has already imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of US goods. The administration has threatened tariffs on the rest.

ANALYST'S TAKE: With new restrictions on a Chinese semiconductor maker, the "U.S. has escalated its trade war with China in an unexpected way", Chang Wei Liang of Mizuho Bank said in a commentary.

The S&P 500 index fell 17.44 points, or 0.7 percent, to 2,641.25.

Stocks took a tumble Monday with the Dow Jones Industrial Averageexperiencing a dramatic swing to close down almost 250 points amid concerns of another wave of Chines tariffs. It fell as much as 566 during the day.

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The Nasdaq composite, which is heavily weighted with technology stocks, lost 116.92 points, or 1.6 percent, to 7,050.29. The Russell 2000 index of smaller-company stocks fell 6.51 points, or 0.4%, to 1,477.31.

But Germany's DAX fell 0.2 percent to 11,316 and the CAC 40 in France sank 0.2 percent to 4,980 after weak eurozone growth figures.

Futures signaled gains for equities in Hong Kong and China, while Japanese stocks were seen opening slightly lower. Microsoft shed 2.9 percent to $103.85.

Amazon.com dropped another 6.3 percent to $1,538.88. The Nasdaq has dropped 13% from its August 29 record high.

US Treasury Secretary Steven Mnuchin told Reuters earlier this month in Bali, Indonesia that China needed to agree to specific "action items" to re-balance the US-China economic relationship, opening markets and changing technology transfer, subsidy and currency policies.

The effects of higher tariffs could be especially severe for tech firms, which make many of their products in China, and for industrial companies, which are already paying higher prices for metals.

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