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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 trade war: global shares plummet as China signals tariff retaliation – business live | US trade war: global shares plummet as China signals tariff retaliation – business live |
| (35 minutes later) | |
| On a data-light Friday, we’ve just had some stronger-than-expected numbers out of the US. | |
| Orders for durable goods - items ranging from kitchen appliances to aircraft that are expected to last three years or more - jumped 3.1% in February, as demand for transport equipment rose by 7.1%. | |
| The headline number was expected to come in at 1.5%, and growth of 3.1% followed a 3.5% fall in January, the commerce department said. | |
| Orders of non-defence related capital capital goods excluding aircraft - considered a bellwether for business spending plans - rose 1.8% last month. It was the biggest gain in five months and beat expectations of a 0.8% increase. | |
| #UnitedStates Durable Goods Orders month-on-month at 3.1% https://t.co/G4gyxTou0U pic.twitter.com/xreKVSkHpH | |
| Joseph Stiglitz, the Nobel prize-winning economist, says China can’t be seen to show weakness against a “bully” like President Trump. | Joseph Stiglitz, the Nobel prize-winning economist, says China can’t be seen to show weakness against a “bully” like President Trump. |
| He told Bloomberg Television in Beijing: | He told Bloomberg Television in Beijing: |
| Particularly when you have a bully like Trump, it would not be good to respond in a weak way. | Particularly when you have a bully like Trump, it would not be good to respond in a weak way. |
| We know about appeasement from Munich. It’s a different kind of a war but in a trade war, appeasement could lead to more and more demands. | We know about appeasement from Munich. It’s a different kind of a war but in a trade war, appeasement could lead to more and more demands. |
| Stiglitz, a Columbia University economics professor, said China was in a better position than the US to withstand a trade war: | Stiglitz, a Columbia University economics professor, said China was in a better position than the US to withstand a trade war: |
| [China is] sitting on $3 trillion of reserves that it can use to help those adversely affected. In the United States we don’t have an economic framework that is able to respond to the particular places that will be affected by a trade war. The fiscal resources of the United States are strained. | [China is] sitting on $3 trillion of reserves that it can use to help those adversely affected. In the United States we don’t have an economic framework that is able to respond to the particular places that will be affected by a trade war. The fiscal resources of the United States are strained. |
| China Can’t Be Seen as Weak Against ‘Bully’ Trump, Stiglitz Says https://t.co/GMSKi92q29 | China Can’t Be Seen as Weak Against ‘Bully’ Trump, Stiglitz Says https://t.co/GMSKi92q29 |
| US futures have reversed earlier losses suggesting Wall Street could open slightly higher. | US futures have reversed earlier losses suggesting Wall Street could open slightly higher. |
| Dow Jones futures are up about 0.1% while S&P futures are up 0.2%. | Dow Jones futures are up about 0.1% while S&P futures are up 0.2%. |
| Trevor Greetham at investment company Royal London Asset Management says now could be the time to buy shares. | Trevor Greetham at investment company Royal London Asset Management says now could be the time to buy shares. |
| In a note titled “the Donald dip becomes a Trump slump”, he says: | In a note titled “the Donald dip becomes a Trump slump”, he says: |
| Stock markets have fallen back sharply towards their February lows. While the initial bout of market weakness this year was blamed on rising wage inflation and fears of higher interest rates, this time round it’s in reaction to President Trump’s announcement of a range of tariffs on imports from China. | Stock markets have fallen back sharply towards their February lows. While the initial bout of market weakness this year was blamed on rising wage inflation and fears of higher interest rates, this time round it’s in reaction to President Trump’s announcement of a range of tariffs on imports from China. |
| Although equities have taken a battering since the market melt-up at the turn of the year when US corporate tax cuts were the focus, these moves aren’t so unexpected. It’s quite normal for markets to remain edgy for a month or two after such a sharp reversal and a move back towards the initial lows is not surprising. | Although equities have taken a battering since the market melt-up at the turn of the year when US corporate tax cuts were the focus, these moves aren’t so unexpected. It’s quite normal for markets to remain edgy for a month or two after such a sharp reversal and a move back towards the initial lows is not surprising. |
| Given this weakness, we’re once again adding to equities and remain overweight stocks in the multi asset funds we manage. It’s noteworthy that commodity markets haven’t reacted particularly badly to the tariffs spat and emerging market equities are outperforming in the sell-off, both signs that global growth remains on track. | Given this weakness, we’re once again adding to equities and remain overweight stocks in the multi asset funds we manage. It’s noteworthy that commodity markets haven’t reacted particularly badly to the tariffs spat and emerging market equities are outperforming in the sell-off, both signs that global growth remains on track. |
| With profits growing and interest rates still below inflation in major developed economies, the fundamentals and outlook remain positive. | With profits growing and interest rates still below inflation in major developed economies, the fundamentals and outlook remain positive. |
| Our delegation @EU_aluminium meeting Commissioner @MalmstromEU today on #Section232 Fruitful and constructive debate about the way forward. #Trade #aluminium pic.twitter.com/RxhaouJQIf | Our delegation @EU_aluminium meeting Commissioner @MalmstromEU today on #Section232 Fruitful and constructive debate about the way forward. #Trade #aluminium pic.twitter.com/RxhaouJQIf |
| Cecilia Malmstrom, the EU’s trade commissioner, has outlined her view on the bloc’s temporary exemption from US tariffs in a series of tweets. | Cecilia Malmstrom, the EU’s trade commissioner, has outlined her view on the bloc’s temporary exemption from US tariffs in a series of tweets. |
| The exemption was agreed after Malmstrom travelled to Washington for talks with US trade representative Robert Lighthizer and commerce secretary Wilbur Ross. | The exemption was agreed after Malmstrom travelled to Washington for talks with US trade representative Robert Lighthizer and commerce secretary Wilbur Ross. |
| ...following discussions with @SecretaryRoss and @USTradeRep in Washington D.C. and Brussels. The EU is not the source of the global problems in the steel and aluminium sectors... 2/4 | ...following discussions with @SecretaryRoss and @USTradeRep in Washington D.C. and Brussels. The EU is not the source of the global problems in the steel and aluminium sectors... 2/4 |
| Preserving the global rules-based system for trade is what we should all be working towards. The EU will also keep our options open in terms of preserving our rights in the @WTO for further action. 4/4 | Preserving the global rules-based system for trade is what we should all be working towards. The EU will also keep our options open in terms of preserving our rights in the @WTO for further action. 4/4 |
| Over in Brussels, where EU leaders are gathered for talks, positivity over the bloc’s 40-day exemption on tariffs, granted by Washington, appears to be wearing thin. | Over in Brussels, where EU leaders are gathered for talks, positivity over the bloc’s 40-day exemption on tariffs, granted by Washington, appears to be wearing thin. |
| Belgium’s Prime Minister, Charles Michel, said he was not impressed at the suspension of tariffs until 1 May: | Belgium’s Prime Minister, Charles Michel, said he was not impressed at the suspension of tariffs until 1 May: |
| I have the impression that the US leader wants to negotiate with the European Union by putting a gun to our head. | I have the impression that the US leader wants to negotiate with the European Union by putting a gun to our head. |
| That’s a strange way to negotiate with an ally. | That’s a strange way to negotiate with an ally. |
| Here is our latest market roundup as China reacts to US steel tariffs: | Here is our latest market roundup as China reacts to US steel tariffs: |
| Peter Rosenstreich, a trader at Swissquote, the online bank, says markets are overreacting to “trade war hype”: | Peter Rosenstreich, a trader at Swissquote, the online bank, says markets are overreacting to “trade war hype”: |
| Markets are overreacting to President Donald Trump’s threats of a trade war. Trump is using the issue for political gain, rather than actual trade repositioning. | Markets are overreacting to President Donald Trump’s threats of a trade war. Trump is using the issue for political gain, rather than actual trade repositioning. |
| This will give him a nice bullet point for stump speeches in the 2020 campaign, but he gains little from sparking a full-blown trade conflict. Besides, the World Trade Organization is still in action. | This will give him a nice bullet point for stump speeches in the 2020 campaign, but he gains little from sparking a full-blown trade conflict. Besides, the World Trade Organization is still in action. |
| Craig Erlam at online trading site Oanda, says investors are concerned that an impending trade war will derail the global economy: | Craig Erlam at online trading site Oanda, says investors are concerned that an impending trade war will derail the global economy: |
| For a person who’s been obsessed with stock market gains since his election victory 16 months ago, US President Donald Trump doesn’t appear too concerned about the impact his tariffs are having at the moment. | For a person who’s been obsessed with stock market gains since his election victory 16 months ago, US President Donald Trump doesn’t appear too concerned about the impact his tariffs are having at the moment. |
| Trump may be prepared to add the European Union to the list of those that are temporarily exempt from the tariffs – with Canada, Mexico and Australia having been allowed similar exemptions – but that has barely cushioned the blow for investors. | Trump may be prepared to add the European Union to the list of those that are temporarily exempt from the tariffs – with Canada, Mexico and Australia having been allowed similar exemptions – but that has barely cushioned the blow for investors. |
| Understandably, the prospect of a trade war between the world’s two largest economies is not particularly desirable for investors. The global economy is finally starting the tick along nicely after a decade of efforts to repair the damage of the global financial crisis and the issues that followed and now we’re potentially having to deal with an entirely self-inflicted and avoidable problem. | Understandably, the prospect of a trade war between the world’s two largest economies is not particularly desirable for investors. The global economy is finally starting the tick along nicely after a decade of efforts to repair the damage of the global financial crisis and the issues that followed and now we’re potentially having to deal with an entirely self-inflicted and avoidable problem. |
| Losses have widened across European market as investors digest the prospect of a US-China trade war. | Losses have widened across European market as investors digest the prospect of a US-China trade war. |
| Here are the latest scores: | Here are the latest scores: |
| FTSE 100: -1% at 6,884 | FTSE 100: -1% at 6,884 |
| Germany’s DAX: -1.9% at 11,877 | Germany’s DAX: -1.9% at 11,877 |
| France’s CAC: -1.9% at 5,068 | France’s CAC: -1.9% at 5,068 |
| Italy’s FTSE MIB: -1.7% at 22,008 | Italy’s FTSE MIB: -1.7% at 22,008 |
| Spain’s IBEX: -1.5% at 9,345 | Spain’s IBEX: -1.5% at 9,345 |
| Europe’s STOXX 600: -1.5% at 364 | Europe’s STOXX 600: -1.5% at 364 |
| Wall Street is also expected to open down: | Wall Street is also expected to open down: |
| Dow Jones futures: -0.7% | Dow Jones futures: -0.7% |
| S&P futures: -0.5% | S&P futures: -0.5% |
| Nasdaq futures: -0.9% | Nasdaq futures: -0.9% |