American Retail Industry Fearful As Trade War Escalates

Sight for Sore Eyes       The start of April may be a welcomed change for Asian investors after a rocky March              Source Bloomberg

Sight for Sore Eyes The start of April may be a welcomed change for Asian investors after a rocky March Source Bloomberg

US President Donald Trump denied on Wednesday that the United States was in a trade war with China, hours after Beijing slapped tariffs on a list of US imports in retaliation for similar duties levied by the White House one day earlier.

"If there was ever a question of whether or not tariffs lead to retaliation, that question was answered today when China announced even more tariffs on USA goods", the Americans For Farmers & Families said in a statement.

And Beijing has not yet responded to White House plans announced March 23 to impose tariffs on $60 billion worth of other Chinese exports in retaliation for the alleged theft of USA intellectual property.

On Tuesday afternoon the USA released a list of 1,300 products from China that it could hit with tariffs, totaling about $50 billion in trade. But they worry that China's measures targeting USA exports of aircraft, soybeans and other products could help bring on a tit-for-tat trade war of escalating sanctions between the world's two biggest economies. It's down nearly 5 percent since March 1 as investors have focused on tariffs as well as controversies surrounding technology companies including Facebook.

Big industrial and technology stocks were hardest hit by the selling. Investors are having to weigh the growing protectionist rhetoric between the United States and China against the chances of measures having a meaningful effect on the still-upbeat global growth picture. That could mean that companies like Apple Inc. and Lenovo Group Ltd. that operate significant Chinese production bases face higher costs or supply-chain disruption.

The Trump tariff on imported solar panels is 30 percent the first year, then gradually falls to 15 percent in four years.

The US could end up the loser from a trade war, according to Mr Aslam.

European stocks also fell. Germany's benchmark 10-year bond yield dipped back below 0.50 percent and toward 2-1/2 month lows hit last week.

Jack Daniel's maker Brown-Forman Corp BFb.N slipped about 1 percent before recovering after whiskey was singled out as the only spirit on which China planned to impose more tariffs.

France set for massive railway strike against President Macron's reforms
Macron wants to transform SNCF, which adds €3 billion to its 47 billion euro debt pile each year, into a profit-maker. More than half of French people view the strikes as unjustified, according to an Ifop poll published on Sunday.

"I don't want to sound Pollyanna-ish but I think the market sees this as the opportunity to trade", he said.

"The US is the biggest market in the world and Trump believes that other countries will make concessions in order to keep that access".

This suggests, that the Trump administration is aware of the potential damage a trade war could have on the USA economy and is keen not to harm economic growth. The S&P 500 (.SPX) fell 28.57 points, or 1.1 percent, at 2,585.88 and the Nasdaq Composite was down 75.51 points, or 1.09 percent, at 6,865.77 as of Wednesday morning.

While critics have complained the administration's policies risk starting a trade war, Trump argued in a post on Twitter that the war had already been lost.

Wholesale gasoline stayed at $1.98 a gallon. Natural gas rose 2 cents to $2.72 per 1,000 cubic feet. The S&P 500 has fallen 4 percent since March 1, the day President Donald Trump said he meant to place tariffs on steel and aluminum imports.

The swing in risk sentiment put the pep back into bonds, with yields on USA 10-year treasury debt down two basis points at 2.76%.

In commodity markets, gold jumped 0.7% to $1,342 an ounce, recovering some of Tuesday's losses.

The rising trade rhetoric saw the dollar buckle to ¥106.16, after edging up from a low of ¥105.70 on Tuesday. Against the euro, the dollar is valued at $1.2283 compared to yesterday's $1.2270.

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