by Wadsam | August 3, 2019 8:01 pm
US stock markets have fallen for a second day after Trump imposed new tariffs on $300bn of Chinese imports. The 10% tariffs will take effect on September 1st. The US stock markets have also ended the week on a low.
The tariffs will affect a range of goods from smartphones to clothing.
The Chinese foreign ministry spokeswoman stated “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.”
The spokeswoman did not state what would happen but China signaled that they might not export rare earth minerals to the United States, which are vital for US industries such as electric car manufacturing and wind turbine production.
Trump decided to impose this plan after China did not honor promises to buy more US agricultural products from the United States.
In later remarks, Trump stated he might raise the tariffs from 10% to 25%.
The US Chamber of Commerce stated that the latest tariffs on China “will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong US economy.” They also urged both sides to remove all tariffs.
Gary Cohn also stated that the battle was having a “dramatic impact” on US manufacturing and capital investment. The Federal Reserve has also cut interest rates for the first time in a decade to pump more money into the economy.
The NASDAQ index in the US was down 1.3% by the end of the week, and the technology companies were vulnerable to the tariffs because many source components produce their goods there. The Dow Jones Industrial Average and the S&P 500 closed 0.37% and 0.73% on respectively on Friday.
Trump stated that his tactics are working and the Beijing is hurting. However, the US is hurting too with their US economy growing less than last year. US firms are holding off on expansion plans and investments which means no new jobs are being created.
Trade wars are now being fought on multiple fronts, with a new one brewing between Japan and South Korea.
Source URL: https://wadsam.com/international-business-news/stock-markets-drop-on-new-trump-china-tariffs/
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