The ongoing trade dispute between the United States and China knocked the yuan to 6.4660 per dollar, its weakest in more than five months in the offshore market. Yet Trump's threat seems aimed at Capitol Hill, not Beijing.
The escalating US-China trade war is hitting trader sentiment as US President Donald Trump threatens to impose tariffs on $200 billion of Chinese goods and China says it will retaliate. But last week, Trump unveiled a revised list that included several categories of chips, raising fears that tariffs could impact the USA technology sector. As of 8:25 p.m. ET, S&P 500 futures were down just over 0.5% and Nasdaq futures were off just over 0.65%. Apple (AAPL), Intel (INTC) and Nike (NKE) slipped about more than 2%.
About 10 minutes into trading, the Dow Jones Industrial Average was down 1.2 per cent to 24,699.90. "They need soybeans. China needs soybeans, and they have to buy some USA soybeans because there's not enough soybeans in the world without it". -Chinese trade negotiations, fell 1.6%.
- Trader confidence has been hit by the escalating trade war between the U.S. and China.
"China can make compromises by boosting imports from the USA, lowering market entry restrictions for U.S. businesses ... but it's hard for China to make compromises at the structural level such as significantly reducing the role the state plays in economic activities", he said.
But Trump's leniency prompted a backlash.
Reuters reported on Monday evening that the US Senate passed a defence spending bill that contained clauses to kill Trump's ZTE deal. All told, Trump is now threatening to penalize up to $450 billion of Chinese goods - a value representing about 90 per cent of Chinese imports past year.
Rather than looking weak with a veto, Trump's threat of dramatically escalating tariffs is a show of strength that has scared investors and may also scare Republican senators into backing down.More news: U.S. Open 2018: Tommy Fleetwood makes entirely forgettable history
"China's economy has already been clouded by a sharp slowdown in fixed asset investment growth due to the government's deleveraging drive, a problematic property sector, a mounting debt burden and rising credit defaults", economists at Nomura wrote.
With Russia and Saudi Arabia pushing for higher output, crude oil markets remained volatile ahead of Friday's OPEC meeting.
"Investors are anxious the USA may impose further restrictions on Chinese tech and Internet products and cause greater uncertainty for the domestic economy", Zhang Gang, Shanghai-based strategist with Central China Securities Co, told Bloomberg News.
President Donald Trump's looming trade war with China ratcheted up so quickly you might have missed it.
Initially, 545 U.S. products valued at $34 billion will be targeted by China, mimicking the Trump administration's tariff rollout.
The new tensions between the world's two largest economies come as Trump, pursuing his "America First" agenda, also wages trade offensives against the European Union, Canada and Mexico among others. That strengthened the hand of Trump officials who have advocated a hard line vs.
The ministry also responded to Trump's threat that a third set of tariffs, again totaling $200 billion wroth of Chinese imports to the U.S., would move forward if China hits back at the first set.