Reuters: Trump's $500 billion trade threat makes China's already battered investors shiver
SHANGHAI/SINGAPORE (Reuters) - Six months of wrangling over trade tariffs with the United States has wiped out about a fifth of China’s stock market value and driven its currency down sharply. But those moves may have just been a downpayment on what is yet to come.
Shanghai's benchmark share index .SSEC is down roughly 22 percent since January, when U.S. President Donald Trump's first trade tariffs on solar panels were announced. It has fallen 9 percent since June 19, when Trump outlined his plans to tax a lot more Chinese imports than he initially proposed.
Tariffs on the first batch of $34 billion worth of Chinese imports kicked in on Friday. Beijing said it had no choice but to respond in kind by taxing a similar amount of U.S. goods coming into China. U.S. tariffs on another $16 billion of Chinese goods are due to go into effect in two weeks, Trump said on Thursday.
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WNU Editor: The Chinese stock market has gone down by 20%, and its currency down by 7% since Arpil. And this is just the start. But the biggest impact will be on U.S. investments and joint ventures in China. No U.S. company in his right mind is going to invest a penny in China right now, and if this trade war continues, U.S. companies will divest massively from China. This loss of U.S. expertise, markets, and investment is going to hurt China significantly, and it will imperil the current precarious financial/debt state of many of its key industries .... industries that are entirely dependent on U.S.. markets. I cannot explain in words the impact that this will have on China, and on U.S. companies that have invested massively in China. As I have said repeaedly in the past, I do not know what advice Presdient Xi is receiving, but he should have kept his promises to President Trump last year at Mar-a-Lago when he made his commitment to stabilize the current trade deficit by purchasing more U.S. goods and by lessening his own tariffs and border regulations on U.S. goods. He promises were forgotten .... but Presdient Trump has not, hence we are in a trade war that shows no signs of ending.
