'Trump threatens to put tariffs on all $500bn Chinese imports – as it happened' diff viewer (11/12)

This article is from the source 'guardian' and was first published or seen on July 20, 2018 07:42 (UTC). It last changed over 40 days ago and won't be checked again for changes.

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Trump threatens to put tariffs on all $500bn Chinese imports – business live	Trump threatens to put tariffs on all $500bn Chinese imports – business live
2018-07-20 14:10:08 UTC	2018-07-20 14:45:08 UTC (35 minutes later)
	The dollar remains in the doldrums as the US currency continues to react to Donald Trump’s complaints about its current strength, along with investor concerns about the escalating trade war tensions with China.
	The dollar index, a measure of its value against a basket of other major currencies, is down 0.6% after it reached a one year high on Thursday.
	The weakness of the dollar has benefited the pound, which is up 0.73% to $1.3107 against the US currency, despite the continuing uncertainties over Brexit.
One of the US central bank’s members has responded to Donald Trump’s comments. Reuters reports:	One of the US central bank’s members has responded to Donald Trump’s comments. Reuters reports:
The Federal Reserve will remain unaffected by President Donald Trump’s comments on U.S. monetary policy and is focused on achieving the goals set for it by Congress, St. Louis Federal Reserve Bank President James Bullard said on Friday.	The Federal Reserve will remain unaffected by President Donald Trump’s comments on U.S. monetary policy and is focused on achieving the goals set for it by Congress, St. Louis Federal Reserve Bank President James Bullard said on Friday.
“The (Fed’s policy-setting) committee has a mandate to keep inflation low and stable and obtain maximum employment for the U.S. economy, so people can comment, including the president and other politicians, but it’s up to the committee to try to take the best action we can to achieve those objectives,” Bullard told reporters following an event in Glasgow, Kentucky.	“The (Fed’s policy-setting) committee has a mandate to keep inflation low and stable and obtain maximum employment for the U.S. economy, so people can comment, including the president and other politicians, but it’s up to the committee to try to take the best action we can to achieve those objectives,” Bullard told reporters following an event in Glasgow, Kentucky.
US markets have made a nervous start but the falls are not as bad as had been feared earlier. Investors are of course concerned about the latest threats from Donald Trump about imposing tariffs on $500bn worth of Chinese imports to the US, but there is some support for markets from Microsoft’s forecast beating results.	US markets have made a nervous start but the falls are not as bad as had been feared earlier. Investors are of course concerned about the latest threats from Donald Trump about imposing tariffs on $500bn worth of Chinese imports to the US, but there is some support for markets from Microsoft’s forecast beating results.
The Dow Jones Industrial Average is down 26 points while the S&P 500 opened just 0.06% lower. The Nasdaq Composite managed to edge up slightly, up 0.19% at the start of trading.	The Dow Jones Industrial Average is down 26 points while the S&P 500 opened just 0.06% lower. The Nasdaq Composite managed to edge up slightly, up 0.19% at the start of trading.
Still with trade, and German chancellor Angela Merkel said in her annual news conference that US complaints only take into account the trade in good. When trade in services and repatriation of profits are included the figures favour the US, she said.	Still with trade, and German chancellor Angela Merkel said in her annual news conference that US complaints only take into account the trade in good. When trade in services and repatriation of profits are included the figures favour the US, she said.
She criticised the tit for tat tariffs imposed or threatened by the US and China:	She criticised the tit for tat tariffs imposed or threatened by the US and China:
We see these potential tariffs both as a breach of WTO rules and also as a danger to the prosperity of many in the world.	We see these potential tariffs both as a breach of WTO rules and also as a danger to the prosperity of many in the world.
Back with the US, and Trump is continuing his attack on “terrible” trade deals:	Back with the US, and Trump is continuing his attack on “terrible” trade deals:
Farmers have been on a downward trend for 15 years. The price of soybeans has fallen 50% since 5 years before the Election. A big reason is bad (terrible) Trade Deals with other countries. They put on massive Tariffs and Barriers. Canada charges 275% on Dairy. Farmers will WIN!	Farmers have been on a downward trend for 15 years. The price of soybeans has fallen 50% since 5 years before the Election. A big reason is bad (terrible) Trade Deals with other countries. They put on massive Tariffs and Barriers. Canada charges 275% on Dairy. Farmers will WIN!
Over in Canada, inflation figures came in higher than forecast.	Over in Canada, inflation figures came in higher than forecast.
The annual rate rose to 2.5% in June from 2.2% the previous month, more than the expected figure of 2.3%. This is the highest figure since February 2012.	The annual rate rose to 2.5% in June from 2.2% the previous month, more than the expected figure of 2.3%. This is the highest figure since February 2012.
And so does the Federal Reserve again:	And so does the Federal Reserve again:
....The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates - Really?	....The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates - Really?
Trump has now turned from trade wars back to currency wars, and this time Europe is getting it too.	Trump has now turned from trade wars back to currency wars, and this time Europe is getting it too.
China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge. As usual, not a level playing field...	China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge. As usual, not a level playing field...
The latest Trump tariff attack on China at least keeps Europe on the sidelines for the moment, sayd Edward Rumble, co-manager of the RWC Continental European Equity fund. He said:	The latest Trump tariff attack on China at least keeps Europe on the sidelines for the moment, sayd Edward Rumble, co-manager of the RWC Continental European Equity fund. He said:
The potential for more restrictive trade between nations may be a serious threat to global growth, and the steady increase in rhetoric and retaliatory actions was already worrying prior to today’s latest comments.	The potential for more restrictive trade between nations may be a serious threat to global growth, and the steady increase in rhetoric and retaliatory actions was already worrying prior to today’s latest comments.
One thing for European investors to consider is that, if Trump is obsessed with China, it does at least temporarily keep his sights off Germany and other European nations. However, given Germany has a €100bn trade surplus with the US, at some stage he will likely come for them as well.	One thing for European investors to consider is that, if Trump is obsessed with China, it does at least temporarily keep his sights off Germany and other European nations. However, given Germany has a €100bn trade surplus with the US, at some stage he will likely come for them as well.
Such actions represent a reversal of a 50-year trend to more liberal trade that has helped fuel economic prosperity around the world for decades. Not surprisingly, many companies are not well prepared for such a scenario, indeed they have been taking advantage of the open environment to optimise manufacturing efficiency on a global basis. In many cases, the current structure will not be optimal if trade barriers require local production in end markets to ensure competitiveness.	Such actions represent a reversal of a 50-year trend to more liberal trade that has helped fuel economic prosperity around the world for decades. Not surprisingly, many companies are not well prepared for such a scenario, indeed they have been taking advantage of the open environment to optimise manufacturing efficiency on a global basis. In many cases, the current structure will not be optimal if trade barriers require local production in end markets to ensure competitiveness.
The current escalation in trade war rhetoric makes sense in the context of November’s mid=term elections, says Will Hobbs, head of investment Strategy at Barclays Smart Investor. He said:	The current escalation in trade war rhetoric makes sense in the context of November’s mid=term elections, says Will Hobbs, head of investment Strategy at Barclays Smart Investor. He said:
We cannot pretend to know for sure that this is all part of a crude negotiating strategy on the part of the US administration. However, today’s sharp escalation makes sense in such a context, particularly with the midterm campaign trail on the horizon - The White House needs to force their opponents to swerve first in this game of trade chicken. On the other side, the political nature of the tariffs threatened to date, such as soybeans, suggests that the Chinese administration see a potential weakness in the President’s approaching moment of indirect electoral accountability.	We cannot pretend to know for sure that this is all part of a crude negotiating strategy on the part of the US administration. However, today’s sharp escalation makes sense in such a context, particularly with the midterm campaign trail on the horizon - The White House needs to force their opponents to swerve first in this game of trade chicken. On the other side, the political nature of the tariffs threatened to date, such as soybeans, suggests that the Chinese administration see a potential weakness in the President’s approaching moment of indirect electoral accountability.
As November’s US midterm elections loom larger, we see economic and political self-interest helping to de-escalate the scrap. In the meantime, the potential for capital markets to be dragged into a disciplinary role suggests investors will again need to call upon their stores of composure to see this through.	As November’s US midterm elections loom larger, we see economic and political self-interest helping to de-escalate the scrap. In the meantime, the potential for capital markets to be dragged into a disciplinary role suggests investors will again need to call upon their stores of composure to see this through.
Olaf van den Heuvel, chief investment officer at Aegon Asset Management, warns that the US president risks destabilising the global economy, and the financial markets:	Olaf van den Heuvel, chief investment officer at Aegon Asset Management, warns that the US president risks destabilising the global economy, and the financial markets:
“So far the Trump trade policy has been more about creating leverage in a negotiation than about levying actual tariffs. Of course, as in a game of poker, you sometimes have to up the ante. The risks are high at this level.	“So far the Trump trade policy has been more about creating leverage in a negotiation than about levying actual tariffs. Of course, as in a game of poker, you sometimes have to up the ante. The risks are high at this level.
The impact on world economic growth of a levy of this magnitude will be severe and will likely have a strong negative impact on markets.”	The impact on world economic growth of a levy of this magnitude will be severe and will likely have a strong negative impact on markets.”
Donald Trump is adamant that he won’t be knocked off course by stock market volatility.	Donald Trump is adamant that he won’t be knocked off course by stock market volatility.
Wall Street is up around 30% since the 2016 presidential election, which Trump says gives him a cushion to challenge China et al on trade.	Wall Street is up around 30% since the 2016 presidential election, which Trump says gives him a cushion to challenge China et al on trade.
He put it to CNBC:	He put it to CNBC:
This is the time. You know the expression we’re playing with the bank’s money.”	This is the time. You know the expression we’re playing with the bank’s money.”
Investor, though, will consider that it’s their money, and fear that a trade war will wipe out their recent gains.	Investor, though, will consider that it’s their money, and fear that a trade war will wipe out their recent gains.
European car shares are falling sharply, following president Trump’s threat to deepen the trade dispute with China.	European car shares are falling sharply, following president Trump’s threat to deepen the trade dispute with China.
Volkswagen are down 2.3%, and BMW have lost 1.5%, on fears that the US could impose tariffs on EU car imports soon.	Volkswagen are down 2.3%, and BMW have lost 1.5%, on fears that the US could impose tariffs on EU car imports soon.
Artjom Hatsaturjants, research analyst at Accendo Markets, says market sentiment has “soured” since Trump threatened to go ‘whole hog’ and impose tariffs on all $500B of Chinese imports to the US.	Artjom Hatsaturjants, research analyst at Accendo Markets, says market sentiment has “soured” since Trump threatened to go ‘whole hog’ and impose tariffs on all $500B of Chinese imports to the US.
Here’s another clip, of Donald Trump explaining why he’s “not thrilled” that the US Federal Reserve keeps raising American interest rates:	Here’s another clip, of Donald Trump explaining why he’s “not thrilled” that the US Federal Reserve keeps raising American interest rates: