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Global markets hit as Trump unveils China tariffs; Bank of England leaves rates on hold - live | |
(35 minutes later) | |
Here’s more on the exemptions to the US steel and aluminium tariff move: | |
#Steel & Aluminum #tarriffs update. US Trade Rep Lighthizer confirms during Senate Finance Committee testimony that these countries will be exempt: - Canada - Mexico- EU- Brazil- Australia- Argentina- South Korea Impact of tariff now only 30% of original announcement! pic.twitter.com/a3UkTngO7A | |
The US move to impose sanctions on China is a high risk strategy, says Mike Jakeman, global analyst at the Economist Intelligence Unit: | |
This has been clearly signposted by the Trump administration and is actually likely to prove broadly popular with US businesses and in Congress. The Democratic minority leader in the Senate, Chuck Schumer, welcomed it as a sign of the US standing up to China. | |
But there is a lot riding on China’s response. The US is gambling that any response will be proportionate. China could hit the US hard in return, by making access to the local market harder for US farmers, for example. Were farmers faced with falling prices for the exports and higher prices at home because of the import tariffs, the popularity of the tariffs would diminish quickly. | |
This is a high-risk strategy for the US administration and one that is likely to weaken, rather than strengthen, the global economy. | |
And here’s Trump’s signed tariff sanctions against China: | |
US President Trump says that tariffs signed today will be the "first of many" - this is just the opening salvo in a global trade war. | US President Trump says that tariffs signed today will be the "first of many" - this is just the opening salvo in a global trade war. |
President Trump is signing the order to impose tariffs on China, which he says could be up to $60bn. | President Trump is signing the order to impose tariffs on China, which he says could be up to $60bn. |
He says he has been talking to senior Chinese representatives and asked them to cut the deficit by $100bn immediately. | He says he has been talking to senior Chinese representatives and asked them to cut the deficit by $100bn immediately. |
He says he wants reciprical deals. “If they charge us, we charge them the same thing.” | He says he wants reciprical deals. “If they charge us, we charge them the same thing.” |
He says China charges 25% for a US car go in,”but we charge 2% for their cars to come into the US - that’s not good.” | He says China charges 25% for a US car go in,”but we charge 2% for their cars to come into the US - that’s not good.” |
He says he has been talking to China, Japan, Europe, and every single one of them wants to negotiate. | He says he has been talking to China, Japan, Europe, and every single one of them wants to negotiate. |
“In meantime we are sending a section 301 action which I will sign here.” | “In meantime we are sending a section 301 action which I will sign here.” |
The proposed tariffs on China are expected shortly. AP sums up the situation: | The proposed tariffs on China are expected shortly. AP sums up the situation: |
The Trump administration is readying restrictions on Chinese investment and tariffs on nearly $50 billion worth of Chinese imports to punish Beijing for stealing American technology and pressuring U.S. companies to hand it over. | The Trump administration is readying restrictions on Chinese investment and tariffs on nearly $50 billion worth of Chinese imports to punish Beijing for stealing American technology and pressuring U.S. companies to hand it over. |
China is already warning that it will take “all necessary measures” to defend itself, raising the prospect of a trade war between the world’s two biggest economies. | China is already warning that it will take “all necessary measures” to defend itself, raising the prospect of a trade war between the world’s two biggest economies. |
The White House says President Donald Trump will direct the Office of the U.S. Trade Representative to publish a list of proposed tariffs for public comment within 15 days. USTR has already identified potential targets: 1,300 product lines worth about $48 billion. The president is also asking Treasury Secretary Steven Mnuchin to come up with a list of restrictions on Chinese investment. | The White House says President Donald Trump will direct the Office of the U.S. Trade Representative to publish a list of proposed tariffs for public comment within 15 days. USTR has already identified potential targets: 1,300 product lines worth about $48 billion. The president is also asking Treasury Secretary Steven Mnuchin to come up with a list of restrictions on Chinese investment. |
A number of countries look like they will be exempt from the proposed US tariffs on steel and aluminium, including the European Union, Mexico, Canada, Australia, Argentina, Brazil and South Korea. China of course is clearly in the frame. | A number of countries look like they will be exempt from the proposed US tariffs on steel and aluminium, including the European Union, Mexico, Canada, Australia, Argentina, Brazil and South Korea. China of course is clearly in the frame. |
Here is the European side, from Daniel Boffey in Brussels: | Here is the European side, from Daniel Boffey in Brussels: |
The EU believes it has won a temporary reprieve from president Donald Trump’s tariffs on steel and aluminium after appealing to Washington to take a step back from a potential trade war. | The EU believes it has won a temporary reprieve from president Donald Trump’s tariffs on steel and aluminium after appealing to Washington to take a step back from a potential trade war. |
Following intensive talks in the US, the EU’s commissioner for trade, Cecilia Malmstrom, said she believed the omens were good, although she indicated concern that the situation could unravel. | Following intensive talks in the US, the EU’s commissioner for trade, Cecilia Malmstrom, said she believed the omens were good, although she indicated concern that the situation could unravel. |
The US is set to impose 25% tariffs on steel and 10% tariffs on aluminium on Friday. The EU has argued that it should be exempt and has threatened to impose a series of retaliatory measures including import duties on US products. | The US is set to impose 25% tariffs on steel and 10% tariffs on aluminium on Friday. The EU has argued that it should be exempt and has threatened to impose a series of retaliatory measures including import duties on US products. |
On returning to Brussels after a two-day trip, Malmstrom said she was confident the US commerce secretary, Wilbur Ross, would suggest a temporary exemption for the EU but conceded that the decision remained in Trumps’ hands. | On returning to Brussels after a two-day trip, Malmstrom said she was confident the US commerce secretary, Wilbur Ross, would suggest a temporary exemption for the EU but conceded that the decision remained in Trumps’ hands. |
“We expect that we are on that list, we don’t know for sure,” she told the European parliament. “It is ultimately the president who decides this. But we expect that secretary Ross will recommend that the EU is excluded as a whole.” | “We expect that we are on that list, we don’t know for sure,” she told the European parliament. “It is ultimately the president who decides this. But we expect that secretary Ross will recommend that the EU is excluded as a whole.” |
The proposed tariffs’ main target is China, which has been flooding the world with cheap steel and aluminium. However, Trump has had few kind words to say about the EU, claiming that it had made life difficult for US exporters. | The proposed tariffs’ main target is China, which has been flooding the world with cheap steel and aluminium. However, Trump has had few kind words to say about the EU, claiming that it had made life difficult for US exporters. |
The full story is here: | The full story is here: |
With markets tumbling it is no surprise the measure of volatility is on the way up again: | With markets tumbling it is no surprise the measure of volatility is on the way up again: |
OUCH! Fear Index #VIX jumps above 20 again as sentiment in US stocks is confused following Fed meeting. Chaos in DC and Sell off in banks add to the confusion. pic.twitter.com/uEv5ySc3tB | OUCH! Fear Index #VIX jumps above 20 again as sentiment in US stocks is confused following Fed meeting. Chaos in DC and Sell off in banks add to the confusion. pic.twitter.com/uEv5ySc3tB |
Back with the Bank of England, and is a May rate rise a done deal? Our economics editor Larry Elliott says it would be a suprise if there is no increase but the Bank has been careful to give itself some wriggle room: | Back with the Bank of England, and is a May rate rise a done deal? Our economics editor Larry Elliott says it would be a suprise if there is no increase but the Bank has been careful to give itself some wriggle room: |
A rate rise will depend on the economic data that is published over the next month and a half, but judging by the minutes of the MPC’s March meeting that data would have to be quite poor for Threadneedle Street to sit tight. | A rate rise will depend on the economic data that is published over the next month and a half, but judging by the minutes of the MPC’s March meeting that data would have to be quite poor for Threadneedle Street to sit tight. |
His full analysis is here: | His full analysis is here: |
And here’s our news story on the Bank’s announcement: | And here’s our news story on the Bank’s announcement: |
The weakness in the FTSE 100 could mean UK-listed companies being targets for potential predators, says Richard Hunter, head of markets at Interactive Investor,: | The weakness in the FTSE 100 could mean UK-listed companies being targets for potential predators, says Richard Hunter, head of markets at Interactive Investor,: |
At current levels, the FTSE100 is just a few points from being down 10% in the year to date, knocking on the door of what is often described as correction territory. | At current levels, the FTSE100 is just a few points from being down 10% in the year to date, knocking on the door of what is often described as correction territory. |
UK equities on the whole have fallen out of favour with international investors with the spectre of Brexit looming, whilst the recent relative strength of sterling has meant additional pressure on the premier index, where the majority of earnings come from overseas. Meanwhile, the possibility of trade disputes particularly between China and the US is denting sentiment, and the move towards tighter monetary policy is another brick in the wall of worry which investors are currently climbing. | UK equities on the whole have fallen out of favour with international investors with the spectre of Brexit looming, whilst the recent relative strength of sterling has meant additional pressure on the premier index, where the majority of earnings come from overseas. Meanwhile, the possibility of trade disputes particularly between China and the US is denting sentiment, and the move towards tighter monetary policy is another brick in the wall of worry which investors are currently climbing. |
This is despite the global, synchronised economic recovery where corporate earnings have so far continued to justify some slightly rich valuations, especially in the US. The UK economy has remained resilient despite any impending Brexit fallout, with the result that some of the top quality FTSE100 companies are moving towards bargain territory – and could even, as a consequence of this index weakness, find foreign groups running the slide rule over some of them as potential bid targets. | This is despite the global, synchronised economic recovery where corporate earnings have so far continued to justify some slightly rich valuations, especially in the US. The UK economy has remained resilient despite any impending Brexit fallout, with the result that some of the top quality FTSE100 companies are moving towards bargain territory – and could even, as a consequence of this index weakness, find foreign groups running the slide rule over some of them as potential bid targets. |