Asian stocks rise amid fears of more China, US tariffs

Randal Sanchez
July 23, 2018

President Donald Trump has indicated that he's willing to hit every product imported from China with tariffs, sending US markets sliding before the opening bell Friday.

Global markets have remained generally calm in recent weeks and months despite the eruption of a full-blown U.S.

"I'm ready to go 500", USA network CNBC quoted the President as saying on the $505.5 billion worth of Chinese imports into the United States in 2017.

"We should let those who advocate trade war know that trade war is not something that can be easily won", China Consul General to Los Angeles Zhang Ping said.

After the interview, Trump reiterated criticism of the Federal Reserve's planned interest-rate hikes, posting on Twitter that the tightening policy would diminish any USA trade advantage and exacerbate losses from "BAD trade deals".

"A few years ago we didn't have a story to justify the yuan weakening", said Iris Pang, greater China economist at ING Bank in Hong Kong. "He doesn't want to move, and they've offered the US options regarding the issue of [intellectual property] theft and forced technology transfer".

As American farmers start to wonder how much President Donald Trump's trade war with Beijing could cost them, China's government has a cartoon soybean ready to answer their questions.

To some extent that policy lost a lot of its credibility in the reaction to the financial crisis, post 2008, and while USA officials have never explicitly acknowledged a desire so openly for a weaker United States dollar in the past they have also never really complained about a strong currency until recently.

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But Mr Trump is known for weathering a storm, and even Trump Derangement Syndrome may not be able to bring him down. Handley, who retired as a chief petty officer, said she started serving under President Ronald Reagan.

China has warned that India is raising a very big risk and it is not going to get anything from a friendly attitude with the USA, but it can increase Beijing's resentment and the efforts to increase exports to China may also be a shock is. "I want them to do well", he said. "I have to tell you, it puts us at a disadvantage".

For a number of years now there has been this universal myth that the USA has worked on the basis that a strong U.S. dollar is good for the United States economy as well as the rest of the world, otherwise known as the "strong dollar policy".

Determined to correct this imbalance, the Trump Administration has already slapped tariffs on $34bn of Chinese products, which China met with retaliatory duties.

While India doesn't have the same direct exposure to China-US trade as other EM economies, it is reliant on global fundings.

Last week, the Trump administration also identified a further $200bn in Chinese goods it may target for tariffs, for a total of $250bn.

"Trump has been clearly bothered by this tactic and yesterday's comments reflected his frustration at losing the battle in the trade war". In a 1990 Playboy interview, Trump was asked about his first action if he ever became president. Mr Trump responded that he was. "I'm doing this to do the right thing for our country".

The US dollar fell against major currencies on Mr Trump's threat to impose more import tariffs and his repetition of complaints about rising interest rates and the strength of the US dollar. "If it stops buying new bonds, or sells off its holdings, it would trigger a hike in yields putting pressure on America's debt load".

The Chinese yuan weakened by almost 1% against the dollar yesterday and continued its slide today, hitting its lowest level in over a year. But rate increases also make borrowing costlier for households and companies and can weaken the pace of growth.

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