2018-09-18 09:13:27 BdST
Asian markets mixed after Trump guns for more China imports
Most Asian markets were mixed on Tuesday after Donald Trump confirmed he will thump China with another round of tariffs, turning up the heat on the trade battle between the world’s two biggest economies.
Investors had been unloading stocks on Monday after reports the president
would press ahead with his fight against what he calls Beijing’s unfair
The latest volley from the White House will see $200 billion worth of goods
taxed at 10 percent from September 24, going up to 25 percent from January 1
if the sides are unable to hammer out a deal.
He also said he had lined up another $257 billion of imports if Beijing
retaliates, as it is expected to do.
That would mean with $50 billion of goods already being hit, Trump will
have subjected virtually all goods China ships to the US to tariffs.
Expectations of the announcement sent US markets lower, with technology
firms among the big losers. Apple, Google parent Alphabet and Facebook were
all sharply down.
However, the tariffs had largely been expected and some key import items
had been left off the list of targets but dealers continue to worry, as the
chances of an all-out trade war grow.
“It appears that the administration responded to some industry concerns,
but for many American businesses and consumers this still represents a rapid
acceleration of costs and much higher uncertainty,” Rufus Yerxa, president of
the National Foreign Trade Council, told Bloomberg News.
“Business hates uncertainty. They’d rather have an imperfect trading
relationship than this much chaos.”
Hong Kong fell 0.7 percent, Sydney lost 0.2 percent and Singapore shed 0.8
But Shanghai edged up 0.3 percent, Seoul gained 0.1 percent and Tokyo
finished the morning 1.1 percent higher.
“While the US tariffs salvo is hardly middling, it’s not as bad as it could
have been, so unless China hits with draconian measures, markets should
remain supported after this morning’s knee-jerk reactions,” said Stephen
Innes, head of Asia-Pacific trading at OANDA.
“Ultimately the graduated tariff hike allows more room to negotiate before
the thumping 25 percent levy gets triggered, so perhaps China may temper
their response accordingly.”
The yuan weakened after the announcement, with the central People’s Bank of
China already facing accusations from some in the US that it is allowing the
currency to drop to offset the effects of the tariffs. The bank denies the
Other high-yielding and emerging market currencies were also taking a hit.
Indonesia’s rupiah fell 0.3 percent as it wallows around levels last seen in
1998 during the Asian financial crisis, while the South Korean won,
Australian dollar and Mexican peso were also off.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 1.1 percent at 23,342.85 (break)
Hong Kong – Hang Seng: DOWN 0.7 percent at 26,738.30
Shanghai – Composite: UP 0.3 percent at 2,660.59
Euro/dollar: DOWN at $1.1679 from $1.1685 at 2040 GMT
Pound/dollar: DOWN at $1.3147 from $1.3159
Dollar/yen: UP at 111.90 yen from 111.83 yen
Oil – West Texas Intermediate: DOWN 32 cents at $68.59 per barrel
Oil – Brent Crude: DOWN 34 cents at $77.71 per barrel
New York – Dow Jones: DOWN 0.4 percent at 26,062.12 (close)
London – FTSE 100: FLAT at 7,302.10 (close).
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