Global stocks sink on trade disputes, safer investments steady

Thursday, 28 Jun, 2018

The move would also dovetail with an internal European Union memo obtained by Bloomberg, which said Trump's aggressive approach to longstanding us partnerships could unwind decades of progress and force nations back into a system where might prevails.

European Commission President Jean-Claude Juncker, Donald Trump, and Xi Jinping.

United States stocks on Monday briefly fell more than two percent from Friday's close and senior White House economic adviser Peter Navarro appeared on television to try to calm investor fears about a possible trade war.

Mattis, a former Marine general, has been highly critical of China's muscular military moves in the South China Sea.

Trump has blamed past U.S. administrations for being soft on China and allowing the country to become dominant in manufacturing, including in products like steel and aluminum, which are subject to USA tariffs, and for failing to protect sensitive technologies.

Despite initial exemptions, Trump eventually chose to impose the tariffs on the European Union, as well as fellow members of the North American Free Trade Agreement (NAFTA), Mexico and Canada.

But it has been worse in China as this chart of the SSE Index of the Shanghai stock market shows.

Harley-Davidson Inc (HOG.N) said on Monday it would move production of motorcycles shipped to the European Union from the United States to its global facilities and forecast the trading bloc's retaliatory tariffs would cost the company $90 million to $100 million a year.

It said it would shift some production out of the USA to try to avoid the costs.

The Chinese government also issued its own set of retaliatory tariffs on US$2.4bn of USA exports including aluminium waste and scrap, pork, fruits and nuts. He said imports threatened America's national security-a justification countries use rarely because it can be easily abused.

The top sectors targeted for these tariffs were machinery, mechanical appliances, and electrical equipment which totalled around US$46.2bn in U.S. imports. Washington could soon add duties on a further $200 billion of Chinese imports.

President Donald Trump in March directed Treasury Secretary Steven Mnuchin to address investment concerns in critical US technologies.

In response, the Chinese revised their own list, which now targets more agricultural products as well as petroleum products and medical equipment, while removing aircraft from the list. The move comes after the European Union pushed back on Trump's steel and aluminum tariffs with its own duties on politically significant U.S. products like motorcycles. The inter-agency panel, which is chaired by the Treasury Department, scrutinizes some deals that could allow a foreign investor to take control of a USA business, and looks for potential risks to national security. That could include holding goods in ports or hold up approvals.

But on this issue they have been driven together by Trump's increasingly aggressive push to levy tariffs both on rival powers - like China - and also longtime allies like the EU. Beijing is also suspicious of USA intentions toward self-governing and democratic Taiwan, which is armed by the United States, though China views the island as a sacred part of its territory.

The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A.