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Business Times
2 days ago
- Business
- Business Times
Asia: Shares stumble after Trump's latest trade threat
[HONG KONG] Asian shares were rattled on Thursday after Donald Trump said he would impose unilateral tariffs on partners in the next two weeks, reigniting trade war fears soon after reaching a deal with China to dial down tensions between the superpowers. The mood was also shaded by geopolitical concerns after the US president said personnel were being moved from the Middle East as nuclear talks with Iran faltered and fears of a regional conflict grew. The equity losses snapped a recent rally fuelled by talks between Beijing and Washington in London that saw them hammer out a framework agreement to move towards a pact to reduce levies. Investors have been on edge since Trump's 'Liberation Day' tariff blitz on April 2 that sent shockwaves through stock and bond markets and stoked global recession fears. Days later he announced a pause in those measures until July 9 to allow for countries to cut deals with the White House, sparking relief rallies that have pushed some markets towards all-time highs. However, he once again shook confidence by saying on Wednesday that he intended to send letters telling governments what levies Washington would be imposing. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'We're going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is,' he told reporters. 'At a certain point, we're just going to send letters out. And I think you understand that, saying this is the deal, you can take it or leave it.' While some analysts indicated that previous threats had been rowed back, the comments added to the ongoing uncertainty about Trump's policies, reviving fears about sky-high levies and the impact on the economy. They also came not long after he had flagged the London agreement, and posted on social media that 'President XI and I are going to work closely together to open up China to American Trade', referring to his counterpart Xi Jinping. 'The uncertainty doesn't help,' Nick Twidale at AT Global Markets Australia said. 'And his overall comments overnight have led to more uncertainty for the market rather than the clarity we were hoping for.' Most Asian markets fell on Thursday, with Tokyo, Hong Kong, Shanghai, Wellington, Taipei and Jakarta in the red after a broadly healthy run-up this week. There were gains in Sydney, Singapore and Seoul. The weak performance followed losses on Wall Street, where trade worries overshadowed another below-forecast inflation reading that provided fresh speculation the Federal Reserve will cut interest rates. Oil prices slipped but held most of Wednesday's surge of between four and five per cent that came after Trump said US personnel were being moved from the potentially 'dangerous' Middle East as Iran nuclear talks stutter. The move came as Tehran threatened to target US military bases in the region if a regional conflict broke out. The US president said the staff were 'being moved out because it could be a dangerous place'. 'We've given notice to move out and we'll see what happens.' With regard to Iran, he then added: 'They can't have a nuclear weapon, very simple. We're not going to allow that.' Trump had until recently expressed optimism about the talks, but said in an interview published on Wednesday that he was 'less confident'. AFP
CNET
2 days ago
- Business
- CNET
Tariff Rates Against China Still Historically High as Trump Touts New Trade Deal
President Donald Trump on Wednesday took to Truth Social to tout a new tentative trade agreement with China, albeit one that leaves the tariff rate against Beijing at historically high levels. "WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%," Trump's post to Truth Social read, with a later post adding, ""President Xi [Jinping] and I are going to work closely together to open up China to American Trade. This would be a great WIN for both countries!!!" Under this new arrangement, if it stands, the US tariff rate against China will be set at 55%, which is actually an increase from the 30% rate set when the two countries declared a truce in May at the start of their negotiations. This came after multiple rounds of escalation that saw the import taxes against China hiked all the way to a rate of 145%. In addition, Trump said that the US will get access to rare earth minerals from China -- including ones vital to the production of technology like smartphones -- while in return Chinese students will be allowed to attend American colleges and universities. During his first term, Trump's trade war with China saw the average tariff rate against China increased to around 20%, which went largely unchanged during the presidency of Joe Biden. Given how much the US has traditionally imported from China, increased tariffs on goods from there will have a much greater impact on the cost of goods than tariffs against other countries. It is unclear at this point when this 55% rate would take effect. The earlier 30% rate was supposed to remain in effect until August while negotiations continued. It is also unclear if this rate will effect all imports from China the same, or if some will be spared.
