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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/mar/23/us-tariffs-shares-plummet-china-signals-retaliation-live
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| US tariffs: Asian shares plummet as China signals retaliation – live | US tariffs: Asian shares plummet as China signals retaliation – live |
| (35 minutes later) | |
| The Kospi index in Seoul, South Korea has closed down 3.29% , or 82 points at 2,414. | |
| The country has a large export industry and stands to lose out if there is a trade war between the US and China. It’s largest trading partner is China and the US is its second biggest. | |
| SE Kim, an employee at a construction company in Seoul, told AP: | |
| I’m worried that it would affect the national economy. If the US imposes tariffs on China like that, I think there would be some damage on us in the long term as well. | |
| It’s been a pretty rough few days on the financial markets. Facebook’s woes are punishing the tech sector, the US Fed hiked interests rates on Wednesday and the Bank of England rate setters were split 7-2 in favour of keeping rates on hold. Only a matter of time before that changes, many believe. | |
| And now the prospect of a trade war. | |
| Michael Hewson at CMC Markets says the potential for a big selloff in the tech sector is especially worrying: | |
| Investors should be rightly fearful of [the Facebook selloff] given that the tech sector has driven most of the gains in US markets over the past 18 months. A meltdown in this sector has the potential to get very messy indeed, with related ripple out effects. | |
| This week’s Fed decision to raise rates and tweak its guidance appears to have cut the rug out further from under the US dollar as policymakers adopted a safety first approach to future rate rise expectations, leaving them unchanged for this year. This appears to have caught markets off balance sending bond yields sharply lower and the US 10 and 2-year spread back towards its previous lows, though some of these declines could also be attributed to concerns about tariffs. | |
| #SeaOfRed #nikkei down 4.51% #devastating pic.twitter.com/BjIHpOoCZa | |
| #SP500 -2,52%, #Nikkei -4,4%, #Shanghai Comp -4%. pic.twitter.com/xjqoHtLdoa | |
| It’s worth looking again at the statement from the Chinese commerce ministry earlier today. | |
| It said that China did not want a trade war, but it was “not afraid” of having one. | |
| China doesn’t hope to be in a trade war, but is not afraid of engaging in one. China hopes the United States will pull back from the brink, make prudent decisions, and avoid dragging bilateral trade relations to a dangerous place. | |
| The interesting thing here is that it does leave a bit of wriggle room so might not necessarily result in an all-out trade war as noted by some of our experts. The memorandum signed by Trump on Thursday allows for a 30-day consultation period that only starts once a list of Chinese goods to be taxed is published. Trump said he views the Chinese as “a friend”, and both sides are in talks so it could be resolved. | |
| The commerce industry said China was considering measures in two stages: a 15% hit on 120 US products, including steel pipes, dried fruit and wine worth $977m. China’s list also included close to 80 fruit and nut products. Then it would levy 25% on $1.99bn of pork and recycled aluminium. | |
| The market in Tokyo is closed. It finished down 4.51%, or 974 points at 20,617. | |
| Masses of reaction from traders so let’s try to roundup some of their comments. | Masses of reaction from traders so let’s try to roundup some of their comments. |
| Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo, sounded a slightly optimistic tone to Reuters by saying that US tariffs might not be quite as bad they appear. But then he essentially says it might get worse before it gets better: | Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo, sounded a slightly optimistic tone to Reuters by saying that US tariffs might not be quite as bad they appear. But then he essentially says it might get worse before it gets better: |
| In the longer run, protectionist policies touted by the United States could be watered down, in turn limiting the negative effect on trade and the global economy. But until the United States makes such concessions, global stocks will be under pressure and the yen will appreciate, especially if China decides to confront the U.S. measures. | In the longer run, protectionist policies touted by the United States could be watered down, in turn limiting the negative effect on trade and the global economy. But until the United States makes such concessions, global stocks will be under pressure and the yen will appreciate, especially if China decides to confront the U.S. measures. |
| Similarly, Vishnu Varathan of Mizuho Bank is quoted by Associated Press saying: | Similarly, Vishnu Varathan of Mizuho Bank is quoted by Associated Press saying: |
| Beijing is extending an olive branch and urging the U.S. to resolve trade disputes through dialogue rather than tariffs. Nevertheless, the first volley of shots and retaliatory response has been set off. | Beijing is extending an olive branch and urging the U.S. to resolve trade disputes through dialogue rather than tariffs. Nevertheless, the first volley of shots and retaliatory response has been set off. |
| Paul Eitelman, senior investment strategist at Russell Investments, tells Bloomberg: | Paul Eitelman, senior investment strategist at Russell Investments, tells Bloomberg: |
| It’s a significant step in escalation in trade tensions between the US and China. The biggest watchpoint from here is how China responds to this and any potential escalation that creates going forward. | It’s a significant step in escalation in trade tensions between the US and China. The biggest watchpoint from here is how China responds to this and any potential escalation that creates going forward. |
| The Australian benchmark index, the ASX200, has closed down almost 2%. The big miners, such as BHP Biliton and Rio Tinto, were among the biggest losers amid concern that demand for the counmtry’s biggest export – iron ore– will be hurt by the tariffs. | The Australian benchmark index, the ASX200, has closed down almost 2%. The big miners, such as BHP Biliton and Rio Tinto, were among the biggest losers amid concern that demand for the counmtry’s biggest export – iron ore– will be hurt by the tariffs. |
| Australia's #ASX200 ends off session lows, but only just... down close to 2% on concerns about a global trade war #ausbiz #stocks #selloff #markets pic.twitter.com/BMVzAX0GbX | Australia's #ASX200 ends off session lows, but only just... down close to 2% on concerns about a global trade war #ausbiz #stocks #selloff #markets pic.twitter.com/BMVzAX0GbX |
| Elsewhere it’s an even grimmer picture. In Tokyo the Nikkei is off a whopping 4.58%. The yen has risen as invesors seek a safe haven, but that’s bad news for Japan’s exporters, hence the big drop in equities. | Elsewhere it’s an even grimmer picture. In Tokyo the Nikkei is off a whopping 4.58%. The yen has risen as invesors seek a safe haven, but that’s bad news for Japan’s exporters, hence the big drop in equities. |
| BOOM! #Nikkei down 4.5% as trade tensions rise quickly. #China #Trump #Tariffs pic.twitter.com/O09r0z58ps | BOOM! #Nikkei down 4.5% as trade tensions rise quickly. #China #Trump #Tariffs pic.twitter.com/O09r0z58ps |
| Australia fears it could be hit by steel tariffs after it emerged that an exemption promised by Donald Trump would run on 1 May. | Australia fears it could be hit by steel tariffs after it emerged that an exemption promised by Donald Trump would run on 1 May. |
| The White House said Friday that Australia, Europe, South Korea, Canada, Mexico, Argentina and Brazil would initially escape America’s 25% steel and 10% aluminium tariffs. But that would run out in a matter of weeks “pending discussions of satisfactory long-term alternative means to address the threatened impairment to US national security”. | The White House said Friday that Australia, Europe, South Korea, Canada, Mexico, Argentina and Brazil would initially escape America’s 25% steel and 10% aluminium tariffs. But that would run out in a matter of weeks “pending discussions of satisfactory long-term alternative means to address the threatened impairment to US national security”. |
| The country’s trade minister, Steve Ciobo, said Australia could not have a fairer deal with the US but it may find itself in the same boat as China. | The country’s trade minister, Steve Ciobo, said Australia could not have a fairer deal with the US but it may find itself in the same boat as China. |
| Here’s the full story: | Here’s the full story: |
| And find out more about the EU’s reprieve – temporary or otherwise – with this story from our man in Brussels, Daniel Boffey: | And find out more about the EU’s reprieve – temporary or otherwise – with this story from our man in Brussels, Daniel Boffey: |
| Good afternoon/good morning and welcome to our business live blog on a tumultuous day for the world economy. | Good afternoon/good morning and welcome to our business live blog on a tumultuous day for the world economy. |
| China has wasted no time in signalling that it will retaliate against Donald Trump’s decision to impose tariffs on Chinese steel and aluminium imports. Beijing’s swift response was expected and, although Asian stock markets have been battered in the wake of Trump’s move, it left some room for negotiation with a plea for the US to “pull back from the brink”. | China has wasted no time in signalling that it will retaliate against Donald Trump’s decision to impose tariffs on Chinese steel and aluminium imports. Beijing’s swift response was expected and, although Asian stock markets have been battered in the wake of Trump’s move, it left some room for negotiation with a plea for the US to “pull back from the brink”. |
| Here are the main developments so far: | Here are the main developments so far: |
| China will impose duties on US pork, apples and steel pipe among other things unless a settlement could be reached | China will impose duties on US pork, apples and steel pipe among other things unless a settlement could be reached |
| Beijing’s commerce ministry said it didn’t want a trade war but was “not afraid of having one” if the US didn’t back down | Beijing’s commerce ministry said it didn’t want a trade war but was “not afraid of having one” if the US didn’t back down |
| Asian shares fell sharply along with key commodities such as iron ore | Asian shares fell sharply along with key commodities such as iron ore |
| The Nikkei is down 4.4%; Hang Seng -2.8%; ASX200 in Sydney -2%; Kospi in Seoul 2.2%; CSI in Shanghai 3.2%. | The Nikkei is down 4.4%; Hang Seng -2.8%; ASX200 in Sydney -2%; Kospi in Seoul 2.2%; CSI in Shanghai 3.2%. |
| The FTSE100 looks set to drop nearly 1% this morning, according to futures trade, while Germany’s Dax is set to drop 1.6%. | The FTSE100 looks set to drop nearly 1% this morning, according to futures trade, while Germany’s Dax is set to drop 1.6%. |
| The Dalian iron ore price is down 5% on fears of a drop in demand for steel | The Dalian iron ore price is down 5% on fears of a drop in demand for steel |
| Copper fell to a three-month low of $6,628.00 per tonne, but oil rose 1% on the back of more Saudi production cuts | Copper fell to a three-month low of $6,628.00 per tonne, but oil rose 1% on the back of more Saudi production cuts |
| The yen and bond prices rose as the US dollar fell back | The yen and bond prices rose as the US dollar fell back |
| The pound was up slightly at $1.416 and €1.444. | The pound was up slightly at $1.416 and €1.444. |