Asian markets tumble as China-US trade tensions rise

Asian markets tumble as China-US trade tensions rise

With some of America's closest trading partners imposing retaliatory measures, Trump's approach to tariffs has unsettled financial markets and strained relations between the White House and the Chamber.

Perhaps most unsettling to businesses and investors, Washington and Beijing have engaged in tit-for-tat tariffs and threatened retaliation that has raised the prospect of a trade war between the world's two largest economies.

The president is holding firm on tariffs and efforts to renegotiate trade terms, tweeting Tuesday morning that the USA economy is strong, "and that's prior to fixing some of the worst and most unfair Trade Deals ever made by any country".

US Chamber president Thomas Donohue said: "Tariffs are simply taxes that raise prices for everyone". However, "even if we don't get into a trade war, all this protracted uncertainty might have an impact on confidence", said Dall'Angelo. Since the president began ratcheting up his mine's-bigger-than-yours confrontation with the U.S.'s top trading partners, we've already seen San Antonio brewers warn of price increases from costlier packaging materials and a Baytown steel pope plant say it's about to scrap a job-creating expansion.

Experts say an increase in USA tariffs could pose a serious challenge to European auto-makers.

Canada's retaliatory tariffs against American imports, including Florida orange juice, ketchup and bourbon, were due to take effect on July 1.

Those tariffs kicked in on Sunday. The U.S. does, however, maintain a 25 percent tariff on imported light trucks.

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The bloc argues that for some goods, such as trucks, United States import duties are higher.

SC is among the hardest hit states, according to the analysis, though Washington stands to lose the most, with $6.2 billion of state exports threatened; $3.7 billion of that is soybean exports to China.

The EU warned in a 10-page submission to the US Commerce Department that imposing import tariffs on cars and auto parts would harm the US automotive industry and may lead to retaliatory tariffs on $US294 billion ($401 billion) worth of US exports, almost one-fifth of US exports.

It also underscores China's new boldness in trying to seize leadership amid divisions between the United States and its European, Canadian and Japanese allies over issues including free trade, climate change and foreign policy.

Instead of backing down, trading partners have responded in kind with similar threats, although the numbers tend to be a little higher, i.e. the US tariff threat total of $200 billion was met by the EU's threat of $300 billion.

President Trump has gone from being supportive of Harley-Davidson to threatening the company with a "huge" tax. "Taken together, weaker-than-expected data gives markets room for thought on whether Trump protectionism has seeped into the real economy", said Song Seng Wun, an economist at CIMB Private Banking. Meanwhile, the U.S.is set to impose a 25 percent tariff on up to $50 billion of Chinese products starting this Friday.

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