Trump’s threat of more tariffs has dampened hopes of a breakthrough in the trade war between the U.S. and China. Traders have hoped that the President would freeze the 15% on $156m of China’s imports in the next raft of tariffs. However, their hopes were dashed as Trump declared otherwise.
During a lunchtime event held at the Economic Club of New York, Trump threatened that he would impose more tariffs on Chinese imports. According to him, the threat will take effect if an interim agreement isn’t reached in the ongoing talks between the two countries. Expectations were high that they will make a deal as Beijing is likely to opt for an agreement.
Global Stock Markets Records Losses
Though the U.S. economy still booms, it slowed in the last quarter. Besides, Trump’s speech on trade affairs has caused markets to record slight dips. Asia records a plunge in stocks while Europe expects a weaker start. Last night, Dow Jones closed unchanged at 27,691.49 on Wall Street. Such a disappointment hasn’t been experienced since 2014.
Likewise, China’s SSE Composite plunged by 0.3% while Nikkei by 0.85% or 200 points in Japan. Both South Korea and Australia lost around 0.8%. The major European indices also dropped by 0.4% in the futures market. They recorded lower levels this morning with the Stoxx 600 index of EU at a dip of 0.35%.
Neil Wilson of Markets.com pointed out that the plunge in European equity markets is as a result of trade affairs speech. He noted that Asian stocks have also recorded losses following Trump’s threat of more tariffs on China’s imports. However, the current market condition may scare investors away from the markets.
In another development, Jerome Powell will testify at the Congress today. America’s top central banker will deliver a speech on trade affairs. He will speak on Fed’s concerns over the trade war and give new guidance about future interest rate moves.