'Wall Street joins market selloff as trade war hits US economy - as it happened' diff viewer (8/9)

This article is from the source 'guardian' and was first published or seen on May 23, 2019 07:48 (UTC). It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/live/2019/may/23/trade-war-china-us-fight-panasonic-huawei-business-live

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Version 8	Version 9
Shares slide and pound dives as trade war and Brexit fears mount - business live	Shares slide and pound dives as trade war and Brexit fears mount - business live
2019-05-23 12:02:15 UTC	2019-05-23 12:34:17 UTC (32 minutes later)
	Russ Mould, investment director at AJ Bell sums up the day so far:
	The markets are not a pretty sight on Thursday with stocks flashing red across the UK, Europe and parts of Asia.
	Investors are spooked by how relations between the US and China seem to be deteriorating, spurred by the US putting Huawei Technologies on a trade blacklist.
	And there’s worse to come, when Wall Street opens in an hour...
	US Opening Calls:#DOW 25520 -0.95%#SPX 2829 -0.93%#NASDAQ 7325 -1.28%#IGOpeningCall
However bad things seem, they can always get worse.	However bad things seem, they can always get worse.
And in the case of the trade war, Donald Trump could create a deeper crisis by imposing additional tariffs on imports of cars from Europe and Japan.	And in the case of the trade war, Donald Trump could create a deeper crisis by imposing additional tariffs on imports of cars from Europe and Japan.
The president decided to hold off these tariffs for 180 days last week, but auto manufacturers remain concerned that Trump sees them as as security risk.	The president decided to hold off these tariffs for 180 days last week, but auto manufacturers remain concerned that Trump sees them as as security risk.
Imposing such tariffs would be a big blow to the global economy, warned economist Willem Buiter of Citi today.	Imposing such tariffs would be a big blow to the global economy, warned economist Willem Buiter of Citi today.
Buiter told CNBC that Germany would be particularly badly hit:	Buiter told CNBC that Germany would be particularly badly hit:
“If we get in a position of tariffs under the section 232 [national security] act that the U.S. is threatening with, for which it has given a reprieve until November, then that would be serious,”	“If we get in a position of tariffs under the section 232 [national security] act that the U.S. is threatening with, for which it has given a reprieve until November, then that would be serious,”
“That would mean tariffs for car imports, for car parts imports, and that would hit Germany the most of any of the large industrial nations. That would be a first-order slap in the economic face,”.	“That would mean tariffs for car imports, for car parts imports, and that would hit Germany the most of any of the large industrial nations. That would be a first-order slap in the economic face,”.
Zhu Huani of Mizuho Bank has warned clients to expect more trade war jitters, as America continues to target Chinese tech firms such as Huawei.	Zhu Huani of Mizuho Bank has warned clients to expect more trade war jitters, as America continues to target Chinese tech firms such as Huawei.
She wrote:	She wrote:
“The stalemate between the U.S. and China looks likely to last longer as both sides continued to ratchet up rhetoric.	“The stalemate between the U.S. and China looks likely to last longer as both sides continued to ratchet up rhetoric.
“Despite potential significant negative spillover effect this might have on U.S. firms, the Trump administration seems determined to curb China’s rise in technology advancement.	“Despite potential significant negative spillover effect this might have on U.S. firms, the Trump administration seems determined to curb China’s rise in technology advancement.
The US stock market is expected to suffer fresh losses when trading begins in two hour’s time.	The US stock market is expected to suffer fresh losses when trading begins in two hour’s time.
The Dow Jones industrial average is tipped to fall by almost 1%, with the broader S&P 500 index called down 0.9%.	The Dow Jones industrial average is tipped to fall by almost 1%, with the broader S&P 500 index called down 0.9%.
Germany’s DAX index is on track for its biggest one-day drop since February, Reuters points out.	Germany’s DAX index is on track for its biggest one-day drop since February, Reuters points out.
Donald Trump’s famous claim that trade wars are “good, and easy to win” is looking increasingly mistaken.	Donald Trump’s famous claim that trade wars are “good, and easy to win” is looking increasingly mistaken.
A year on, Beijing has not backed down, and US farmers are suffering the impact of higher tariffs on crucial products such as soybeans.	A year on, Beijing has not backed down, and US farmers are suffering the impact of higher tariffs on crucial products such as soybeans.
Harvard professor Jeffrey Frankel has written about how Trump’s trade war has backfired “spectacularly”:	Harvard professor Jeffrey Frankel has written about how Trump’s trade war has backfired “spectacularly”:
His trade war with China has hurt almost every segment of the US economy and created very few winners. The losers include not only consumers but also firms and the workers they employ, from farmers losing their export markets to manufacturers forced to pay higher input costs. Even the US auto industry, which did not ask for Trump’s “protection”, is worse off overall because it has to pay more for imported steel and auto parts.	His trade war with China has hurt almost every segment of the US economy and created very few winners. The losers include not only consumers but also firms and the workers they employ, from farmers losing their export markets to manufacturers forced to pay higher input costs. Even the US auto industry, which did not ask for Trump’s “protection”, is worse off overall because it has to pay more for imported steel and auto parts.
As a result, Trump has come close to accomplishing something seemingly impossible: tariffs that benefit almost no one. Protectionism is usually explained as the result of special interests wielding disproportionate power. Trump’s tariffs against Chinese goods do not fit this theory. And a theory that does explain them may not exist.	As a result, Trump has come close to accomplishing something seemingly impossible: tariffs that benefit almost no one. Protectionism is usually explained as the result of special interests wielding disproportionate power. Trump’s tariffs against Chinese goods do not fit this theory. And a theory that does explain them may not exist.
Trump's trade policy is a hot mess of conflicting goals – with few winners \| Jeffrey Frankel	Trump's trade policy is a hot mess of conflicting goals – with few winners \| Jeffrey Frankel
Seema Shah, senior global investment strategist at Principal Global Investors, has warned that the US-China trade war is likely to intensify.	Seema Shah, senior global investment strategist at Principal Global Investors, has warned that the US-China trade war is likely to intensify.
She is sceptical that the impact of the dispute will be limited to only Chinese firms, saying the impact on US business should not be understated.	She is sceptical that the impact of the dispute will be limited to only Chinese firms, saying the impact on US business should not be understated.
Several U.S. technology sub-sectors have significant exposure to China via supply chains. For many large U.S. chipmakers, more than 30% of their sales are in China, and for a few that number is closer to 60%. If the U.S. government chooses to roll out this “export control” strategy to more companies, the effect on U.S. tech – and the knock-on effect on the wider market - could be devastating.	Several U.S. technology sub-sectors have significant exposure to China via supply chains. For many large U.S. chipmakers, more than 30% of their sales are in China, and for a few that number is closer to 60%. If the U.S. government chooses to roll out this “export control” strategy to more companies, the effect on U.S. tech – and the knock-on effect on the wider market - could be devastating.
But won’t Donald Trump back down, if he sees Wall Street bathed in red? Not necessarily, given wider concerns over China.	But won’t Donald Trump back down, if he sees Wall Street bathed in red? Not necessarily, given wider concerns over China.
“First, when it comes to technology and defence related issues, not only is there a fair degree of consensus across Congress to be tough on China, but many large economies share America’s concerns about China’s practises. Second, U.S. demands around technology and defence will be very difficult to meet given that they are focused on containing China’s aspirations to be a global technology leader, and therefore too existential for China to concede.	“First, when it comes to technology and defence related issues, not only is there a fair degree of consensus across Congress to be tough on China, but many large economies share America’s concerns about China’s practises. Second, U.S. demands around technology and defence will be very difficult to meet given that they are focused on containing China’s aspirations to be a global technology leader, and therefore too existential for China to concede.
“While a compromise on tariffs is still possible, investors should prepare for a longer, more hostile, technology war–with some meaningful collateral damage.”	“While a compromise on tariffs is still possible, investors should prepare for a longer, more hostile, technology war–with some meaningful collateral damage.”
European stock markets have slumped deeper into the red, as hopes of a trade war breakthrough fade.	European stock markets have slumped deeper into the red, as hopes of a trade war breakthrough fade.
Britain’s blue-chip FTSE 100 has now shed more than one hundred points, or 1.35%, in a wide-raging rout.	Britain’s blue-chip FTSE 100 has now shed more than one hundred points, or 1.35%, in a wide-raging rout.
Germany’s DAX and France’s CAC indices are having an even worse day, down 1.7%, following the losses in Asia overnight.	Germany’s DAX and France’s CAC indices are having an even worse day, down 1.7%, following the losses in Asia overnight.
China’s threat not to resume trade talks with America (see here), the swathe of tech companies ditching Huawei (see here), and rising fears of a no-deal Brexit (see here) are all hitting investor confidence.	China’s threat not to resume trade talks with America (see here), the swathe of tech companies ditching Huawei (see here), and rising fears of a no-deal Brexit (see here) are all hitting investor confidence.
The news that eurozone factory output is still shrinking as orders contract (see here) isn’t helping the mood either.	The news that eurozone factory output is still shrinking as orders contract (see here) isn’t helping the mood either.
A deepening trade war, and an escalating Brexit crisis, would both hurt economic growth, damage companies across the globe, weaken profits, and hit consumers in the pocket.	A deepening trade war, and an escalating Brexit crisis, would both hurt economic growth, damage companies across the globe, weaken profits, and hit consumers in the pocket.
Dean Popplewell of trading firm OANDA says investors are much gloomier about the trade war.	Dean Popplewell of trading firm OANDA says investors are much gloomier about the trade war.