Economy News

Trump’s Tariff Threat Reduces The Price Of Global Stocks And Oil


Investors who were optimistic that the trade war is likely to end soon were in for a shock as Trump tweeted a threat to China. That sent the global stocks especially the Asian stocks into a free fall. The Chinese shares led the fall with more than 5% reduction after Trump indicated a rise in tariffs against Chinese products to put more pressure on China to work out a deal more favorable to the US.

The Asian stocks had recovered in the last couple of months as the negotiations were going on smoothly and also the stimulus provided by the Chinese government has put the Chinese economy on recovery. But now with Trump’s comment of increasing tariffs, the investors are jittery, and the prices of oil and other products fell weakening the Chinese currency. The Hang Seng fell by 3.3%, the Taiex, Taiwan index fell by 1.8% and the S&P 200 in Australia reduced by 0.8%.

Though the Japanese and the South Korean market was closed today, the Nikkei futures fell by 1.9%. Europe is also not likely to be spared of this impact with Germany’s DAZ expected to open at 1.7% lower than the previous day and CAC of Paris down by 1.6%.

The offshore yuan was at 6.8215, and the onshore yuan ended at 6.7805 for a dollar. The euro fell by 0.1% and was at $1.1193, and the dollar index was at 97.579 up by 0.06%.

To add to the threat by Trump, there are conflicting reports of China canceling the talks, but the Chinese Vice President has plans to visit Washington this week leading to confusion in the market. There are many analysts who opine that it is a tactic by Trump to make China agree to the terms laid out by the US. A leading analyst said, “I think this has got the potential to be a real game changer. There is still a question of whether this is one of the famous Trump negotiation tactics or are we really going to see some drastic increase in tariffs. If it’s the latter, we’ll see massive downside pressure across all markets.”

The Commodity markets which were on a high after trade sanction on Iran and reduction in oil production by OPES saw a reduction in oil prices to a 5 week low in reaction to the comments made by Trump in his tweet. The US crude fell by 3% and was at $60.51 for a barrel and Brent was down by 2.2% and ended at $69.28 for a barrel.

David Grundy
About author

David Grundy covers breaking news stories of finance industry for FinanceKnown. He is news reporter having 10 years of experience in this field. He also writes news articles on financing, banking, investment and much more.
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