Dow Jones falls 473 points as US-China trade fears escalate

Dow Jones falls 473 points as US-China trade fears escalate

Dow Jones falls 473 points as US-China trade fears escalate

As of Monday, a Chinese spokesman said that a trade delegation would still make the trip, although exactly who would show up was unclear.

The official Communist Party newspaper, the People's Daily, led the charge, warning the U.S. to "not even think about" concessions. Sorry, we're not going to be doing that anymore!' It's CSI 300 index took a 5.5 percent hit on the news. Oil prices were also down, with crude futures dropping 26 cents to $61.68 a barrel. The Dow Jones Industrial Average fell 0.3% to 26,438.48.

U.S. Trade Representative Robert Lighthizer said those tariffs on China will take effect on Friday, and he and Trade Secretary Steven Mnuchin accused China of "reneging" on commitments to change its trade policies.

President Trump was coasting Monday morning on the positive economic outlook for the United States, as reflected in a Friday jobs report that boasted a 3.6 unemployment rate. Chinese tariffs on USA oil and gas could rise to a reciprocal 25 percent tariff. China's economy is decelerating; the International Monetary Fund expects Chinese economic growth to slip from 6.6% a year ago to 6.3% in 2019 and 6.1% in 2020. These, the USA contends, include hacking into US companies' computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to Chinese markets and unfairly subsidizing Chinese tech firms.

AMD, Intel, and Nvidia share prices dropped sharply over the weekend as President 45 announced that another $325bn worth of imported Chinese goods will face the same 25% trade tariffs that have already been imposed in the current US/China trade war.

The United States now has 25 percent tariffs on $50 billion of Chinese machinery and technology goods, and 10 percent tariffs on $200 billion of products ranging from computer modems and routers to furniture, lighting and building materials. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. "No!", Trump said, expressing dissatisfaction about the pace of trade negotiations and what he considered a Chinese attempt to renegotiate some aspects of the proposed deal. His hard line on China has played well with his political base in Midwestern industrial and farm states, with Trump seeking re-election next year.

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It's yet to be determined whether the brinksmanship tactics from the Trump administration will help or hurt the prospects of a deal getting done quickly, something that investors want.

The New York Times' story on this development is full of speculation about Trump's motives.

'Hang tough on China, President, ' Schumer said in a tweet. "Strength is the only way to win with China".

Analysts are also concerned that, as a large number of tech products are manufactured in China, or at least demand components from there, the escalation will end up costing United States consumers as price to the end-user will also rise.

"With the 2020 US presidential election season beginning to spin in the media, an impatient USA president is turning to bullying to try to push trade talks to a conclusion", said Carl Weinberg, chief global economist with High Frequency Economics, in a research note. However, if the United States president wants Beijing to carry out the real reforms that Washington wants, he has "little chance of succeeding".

This isn't the first time an apparent agreement faltered.

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