US protectionism is in accord with the spirit of the times – but it won’t have a happy ending
Much to the delight of Hollywood, Donald Trump wants to open a new front in his trade offensive by punishing China for theft of America’s intellectual property rights.
The US entertainment industry is not awfully keen on Trump, having strongly backed Hillary Clinton in the 2016 election, but is even less keen on its movies and TV shows being ripped off by the world’s most populous country.
Connor Campbell, analyst at Spread Ex, says traders are also weighing up the news that has come from the White House in the past 24 hours:
Despite a 24 hour period stuffed with international developments, the markets avoiding any drastic movements this Friday.
Perhaps it’s because investors are caught between Donald Trump signing an order dictating tariffs on metal imports – but one with room for country-by-country exceptions – and the news that the President is set to meet Kim Jong-un for an unprecedented summit.
Here are the latest scores on the board as investors await the main event this afternoon with the US non-farm payrolls report for February.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
After shrugging off Donald Trump’s decision to press ahead with plans to impose tariffs on steel and aluminium imports, European investors are in a more cautious mood this morning.
Ultimately it’s not the headline jobs number that is likely to be the primary market mover here, it’s the average hourly earnings data and markets will be looking to see if the jump to 2.9% in January is sustained in the February numbers, with 2.8% expected.
This would probably be sufficient to keep the four rate rise expectation for 2018 on the table after the jump from 2.5% in December.
Foreign minister Wang Yi warns that the only outcome from Trump’s protectionist measures will be ‘harmful’
The prospect of a trade war between China and the United States has increased after Beijing’s foreign minister said it would make a “necessary response” in the event of Donald Trump introducing punitive tariffs on steel and aluminium imports.
The US president was expected to approve the 25% levy on steel and 10% on aluminium imports this week, possibly as early as Thursday.
China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!
Expanding economic power will be crucial to China, but can the new ‘empire’ thrive?
It was breathtaking even if inevitable. China has abandoned its constraints on one-party rule. In 1980 Deng Xiaoping, the author of the Chinese miracle, wrote into China’s constitution 10-year term limits for its presidents and committed the country to the rule of law. Certainly China would continue as a one-party state, but it would be one that operated within constitutional bounds. Never again would the country suffer the depredations of a despot like Mao. Deng even held out the possibility that by 2030 China might become a democracy with a properly independent judiciary.
No more. Last Sunday the People’s Dailyannounced that President Xi would be carrying on in office indefinitely. Equally ominously, the constitutional commitment to the rule of law – in any case more observed in the breach – was to be transformed into a commitment to “wielding the law to rule”. No prizes for guessing who would wield that law. A newly drafted first clause in the constitution, in line with the “thoughts of Xi Jinping”, declares that the “leadership of the Chinese Communist party is the most essential feature of socialism with Chinese characteristics”.
Chinese officials warn against unilateral trade limits after 25% tariff imposed on steel imports
China has expressed “grave concern” over US plans to impose tariffs on steel and aluminium, with the move likely to hurt US allies as well as Chinese producers.
Donald Trump’s announcement that the US will impose tariffs of 25% on steel imports and 10% on imported aluminium next week sent stock markets around the world tumbling and could prompt other countries to take action.
The threat of a trade war with China led the Dow Jones to lose over 570 points and the S&P 500 and Nasdaq both to drop close to 2%
US stock markets tumbled on Thursday after Donald Trump said the United States would impose tariffs of 25% on steel imports and 10% on imported aluminum next week.
The threat of a trade war with China and higher goods prices led to a sharp sell off with the Dow Jones Industrial Average losing over 570 points (2.23%) and the S&P 500 and Nasdaq both dropping close to 2%.
Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!