May 06 | 2019
Trade Tensions Rise as Prospect of Further Tariffs Grows
Markets have reacted negatively to the threat that U.S. President Donald Trump intends to bring new tariffs to bear on Chinese goods.
Reports had suggested that trade negotiations were progressing, with the prospect of tariffs lifting; however the latest statements form Trump via twitter now suggest that tensions may be rising.
“The 10 percent will go up to 25 percent on Friday … The trade deal with China continues, but too slowly, as they attempt to renegotiate. No!,” Trump tweeted, referring to 10 percent tariffs in place on roughly US$200 billion worth of Chinese goods.
U.S. equity futures fell more than 2 percent and stocks across Asia tumbled, while China’s main indexes slid 5 percent on the news. As a sign of tightening Chinese concern on the issue, news outlets in the country have been told not to report on Trump’s tweets and instead refer only to coverage from the official Xinhua news agency.
Trade Talks Continuing
In response, China said that plans to send a delegation to the U.S. for trade talks were still in place and that it was “of vital importance” that both countries “meet each other half way, and strive to reach a mutually beneficial, win-win agreement on the basis of mutual respect.”
Speaking at a news conference on Monday, Chinese Foreign Ministry spokesman Geng Shuang said: “We are also in the process of understanding the relevant situation. What I can tell you is that China’s team is preparing to go to the United States for the discussions.”
Long-term Uncertainty
Uncertainty over tariffs has weighed on markets over the last 12 months as global trade has slowed and the latest spike in discord may further impede long term plans. While Trump has shored up support within his core base, opposition from industrial associations in the U.S. has started to mount due to fears over losses.
“If the president follows through with his threat, the consequences will be dire. Raising tariffs to 25 percent could cost nearly 1 million American jobs, according to recent estimates, This decision will also roil financial markets and increase the likelihood of retaliation,” a spokesperson for bipartisan campaign group TariffsHurt said.
The outlook for breakbulk transport in the chemicals, automotive and steel is particularly affected by tariffs with long-term forecasting all but impossible given the apparently volatile state of negotiations.
Reports had suggested that trade negotiations were progressing, with the prospect of tariffs lifting; however the latest statements form Trump via twitter now suggest that tensions may be rising.
“The 10 percent will go up to 25 percent on Friday … The trade deal with China continues, but too slowly, as they attempt to renegotiate. No!,” Trump tweeted, referring to 10 percent tariffs in place on roughly US$200 billion worth of Chinese goods.
U.S. equity futures fell more than 2 percent and stocks across Asia tumbled, while China’s main indexes slid 5 percent on the news. As a sign of tightening Chinese concern on the issue, news outlets in the country have been told not to report on Trump’s tweets and instead refer only to coverage from the official Xinhua news agency.
Trade Talks Continuing
In response, China said that plans to send a delegation to the U.S. for trade talks were still in place and that it was “of vital importance” that both countries “meet each other half way, and strive to reach a mutually beneficial, win-win agreement on the basis of mutual respect.”
Speaking at a news conference on Monday, Chinese Foreign Ministry spokesman Geng Shuang said: “We are also in the process of understanding the relevant situation. What I can tell you is that China’s team is preparing to go to the United States for the discussions.”
Long-term Uncertainty
Uncertainty over tariffs has weighed on markets over the last 12 months as global trade has slowed and the latest spike in discord may further impede long term plans. While Trump has shored up support within his core base, opposition from industrial associations in the U.S. has started to mount due to fears over losses.
“If the president follows through with his threat, the consequences will be dire. Raising tariffs to 25 percent could cost nearly 1 million American jobs, according to recent estimates, This decision will also roil financial markets and increase the likelihood of retaliation,” a spokesperson for bipartisan campaign group TariffsHurt said.
The outlook for breakbulk transport in the chemicals, automotive and steel is particularly affected by tariffs with long-term forecasting all but impossible given the apparently volatile state of negotiations.
