Trump Just Issued a Warning to President Xi on Trade

Andrew Cummings
May 13, 2019

Tariffs of 5% to 25% will take effect on June 1 on about 5,200 American products, including batteries, spinach and coffee, the Finance Ministry said. Apple fell 5.4% and Caterpillar dropped 5.1%. The euro bought $1.1235, little changed.The Aussie lost 0.2% to 69.90 US cents.

The S&P index recorded six new 52-week highs and 11 new lows, while the Nasdaq recorded seven new highs and 83 new lows.

China today made good on a threat to retaliate against a sharp increase in United States import tariffs despite a warning from President Trump not to do so.

The result has been a volatile week-long roller coaster with no end in sight.

Last Thursday morning the Dow skidded 580 points, only to regain almost 470 by close of trading on Friday. "He claimed that it had been "proven recently" that out of the 25 percent increase, "only 4 points were paid by the U.S." while "21 points" were paid by China".

While Kudlow said that China has invited top United States trade officials to Beijing to continue talks, no date for a potential 12th round of negotiations has been announced.

Trump has also threatened to impose an additional 25 percent tariffs on $325 billion worth of imports from China.

Trump declared on Twitter Monday: "China should not retaliate-will only get worse!" "Too expensive to buy in China. You had a great deal, nearly completed, and you backed out!"

In previous cases, China imposed tit-for-tat penalties immediately. But Beijing also appeared to dig in. "We see a significant risk for all Chinese imports to be subject to tariffs over the next month or so", said Michael Hanson, head of global macro strategy at TD Securities.

The president said Monday that that's not inevitable.

Kudlow told Fox News there is a "strong possibility that the two presidents will meet in Japan at the G-20 meeting" of economic powers in June.

"The lack of resolution in the latest U.S".

In a series of tweets, Mr Trump indicated toughening of his stand against China.

"It " s not China that pays the tariffs, it " s the American importers, the American companies that pay what, is in fact, a tax increase", he said. There will be nobody left in China to do business with'.

Farmers, who are a core political constituency for Trump's Republicans heading into the 2020 presidential and congressional elections, are growing increasingly frustrated with the protracted trade talks and the failure to reach an agreement.

At the center of the selloff were shares of technology companies including chipmakers, manufacturing giants and retailers that are exposed to China.

As the trade dispute extends, investors expect tariffs to increase corporate costs, lower profit margins and hinder the ability of companies to plan or make capital expenditures. "Buyers of product can make it themselves in the U.S. (ideal), or buy it from non-Tariffed countries.", he said. "The details will be on the USTR website on Monday as we begin the process before a final decision on these tariffs", read the note.

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