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Trump threatens new tariffs on Chinese imports, Beijing calls it 'blackmail'

21 Juin 2018

With concerns growing on Wall Street, the Dow Jones industrial average closed down almost 300 points - more than 1 percent - on its sixth straight losing day.

Global stock markets fell with US bond yields and agricultural commodities on Tuesday, while the dollar rose and investors flocked to safety in the face of a rapidly escalating U.S.

ASIA'S DAY: Japan's benchmark Nikkei 225 index dropped 0.8 percent to close at 22,680.33.

The U.S., Europe, Japan and other trading partners complain Beijing's tactics including outright theft of foreign technology and subsidies and protection from competition for fledgling Chinese industries.

Trump announced tariffs on Friday on US$50 billion (RM199.8 billion) of Chinese imports, including cars, starting on July 6. Those are on top of 25 per cent tariffs on $50 billion in Chinese goods that Trump already floated. Beijing said it would respond with "comprehensive measures" if that happens. The tariffs were quickly matched by China on USA exports, a move that drew the president's ire. The S&P 500 index gave up 11.18 points, or 0.4 percent, to 2,762.57. The Nasdaq composite is down 21 points, or 0.3 percent, to 7.725.

Germany's DAX was down 1.36 per cent while France's CAC 40 declined 1.23 per cent. Boeing and Caterpillar fell more than 3% apiece.

In another surprise move, Chinese smartphone marker Xiaomi said before the market open on Tuesday that it would postpone its application for a mainland share offering until after it completes a separate listing in Hong Kong. Indexes in Australia and India took smaller losses. Worldwide markets suffered steeper losses. It's the world's largest bilateral trading relationship.

Trump is gambling that Beijing has the most to lose.

He also warned of "additional tariffs" should China retaliate.

Shares of large US companies with significant overseas business were hit especially hard. The euro rose to $1.1617 from $1.1607.

Anxiety about global trade spurred demand for currency safe havens, such as the Japanese yen and Swiss franc.

"Due to the fact that the USA continues to apply protective measures in the form of additional import duties on steel and aluminum and refuses to provide compensation for Russia's losses, Russia is using its WTO rights and introducing balancing measures with respect to imports from the United States", Oreshkin said, according to Russian newspaper Kommersant. The yield on the US 10-year Treasury fell to 2.88 percent from 2.92 percent.

He estimated that US crop farmers have lost $100 per acre in revenue over the past two weeks in the most rapid erosion of USA farm profit since at least 1979 due to the administration's battle with China. E-commerce company JD.com lost 4.3 percent to $41.88 and its competitor Alibaba slid 2.6 percent to $203.15.

Shares of Japanese construction equipment makers Komatsu Ltd and Hitachi Construction Machinery tumbled 3.9 percent and 2.8 percent, respectively. Other media companies are rallying as investors hope for more deals.

That deadline has been extended several times as Canada and Mexico struggle to accommodate far-reaching USA demands for change, such as a sunset clause that would allow one nation to pull out after five years.

That sent interest rates lower and bank stocks dipped as well.

The moves could start to meaningfully slow US growth, economists warn. She said Canada, Mexico and the US will continue negotiating NAFTA through the summer and that she is convinced there is "goodwill" moving forward. Brent crude, used to price global oils, gained 66 cents to $74.10 in London.

Trump threatens new tariffs on Chinese imports, Beijing calls it 'blackmail'