Reuters Insider - Stocks fall as Trump issues higher tariff threat

Great American Financial

26/08/2019 02:59

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Source: Reuters Insider

Description: Stocks fell two or more percent Friday before President Donald
Trump made good on a threat to escalate the trade war between the U.S. and
China by jacking up planned tariffs on Chinese-made goods in retaliation for
Beijing's threat of new tariffs. Conway G. Gittens reports.
Short Link: https://tmsnrt.rs/2ZoyKhn

Video Transcript:

China, on Friday, announced new tariffs on US products sending Wall Street
into a tailspin and causing President Trump to erupt in anger. All signals
that the trade turmoil is far from over. Reuters Trade Correspondent Andrea
Shalal.

And another dramatic development on Friday, President Trump has now increased
the tariffs on two sets of Chinese imports – one already in effect,
that’s $250 billion worth of Chinese goods; and additional tariffs that
go into effect September 1 and December 15. Both go up by 5%. One rate goes
from 25% to 30%. The more sensitive goods that will potentially really affect
American consumers – laptops, toys, clothing – those go up from 10%
to 15%.

This latest flare-up started when Beijing announced tariffs on $75 billion
worth of US goods, which prompted a Twitter tirade from Trump who wrote,
“Our great American companies are hereby ordered to immediately start
looking for an alternative to China, including bringing your companies HOME
and making your products in the USA”. The Dow plunged more than 600
points by the closing bell, led by Apple, Intel, and Nike, all companies with
either major operations within or sales to China. Oil prices tumbled as well,
and so did prices for soybeans, a major US export to China. The drops followed
China’s plan to slap import taxes of between 5% and 10% on over 5,000
American products including grains and crude oil. That decision is in
retaliation to a Trump threat last month to raise tariffs on $300 billion
worth of Chinese goods including consumer electronics. The tit-for-tat
escalation in an ongoing trade war ratcheted up Wall Street fear that without
a resolution the trade impasse could further slow down the global economy and
eventually erode US economic growth. Federal Reserve Chairman Jerome Powell
warned on Friday if that happens, the Fed won’t have the tools to fix
that