- President Trump plans on increasing tariffs on China if it refuses to sign the phase 1 deal.
- Global financial markets under pressure following Trump's statement.
- Impeachment inquiry against Donald Trump expected to be a market mover.
- China condemns U.S Senate for approving bill that supports protests in Hong Kong.
- China wants Trump Administration to roll back the current tariffs.
The U.S – China trade talks continue to keep the global financial markets on toes. Following the optimism of the phase 1 deal with China that saw cancellation of the October tariff hike, President Trump stated late on Tuesday that the United States of America will impose punitive tariffs on Chinese goods if it doesn’t sign a deal with the U.S. As per the financial experts, Trump’s threat has stirred up the uncertainty in the global stock markets once again.
Stoxx 600, the pan-European index was reported trading 0.6% down earlier on Wednesday. Sources have reported banks, oil and gas, and autos stocks dropping as high as 1% following the announcement from the Trump administration. Analysts further highlighted the major bourses and all sectors of the index turning red as of Wednesday morning.
President Trump gave the statement in Tuesday’s cabinet meeting. While evaluating options if China refuses to sign a deal, the U.S President expressed his intention to increase the tariffs even higher than previously expected.
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China Is Insisting The U.S To Roll Back Current Tariffs
China has been insisting the Trump administration to roll back the current tariffs as part of the phase 1 deal. Upon refusal, Beijing recently expressed its pessimism and hinted at the prospect of not signing the deal with the U.S. Economists, therefore, have construed Trump’s statement as the response to China’s pessimism.
The foreign ministry of China has also condemned the U.S Senate on Wednesday for unanimously approving the bill that supports the ongoing protests in Hong Kong. In light of the recent developments, South Korea’s Kospi, Australia’s S&P, and the Asia Pacific stocks were also reported in the negative territory.
The FTSE 100 index opened at 7323.80 on Wednesday. With a drop of 0.88% for the day, the index is currently trading at around 7,255 level. The S&P 500 index also remained under pressure on Tuesday, opening at 3,127.45 and closing for the day around 3,120.14 that further highlights the strong impact of the events of U.S – China trade talks on the prominent financial markets around the globe.
Impeachment Inquiry Against President Trump Expected To Be A Market Mover
Stock market analysts have also recommended traders to be wary of the impeachment inquiry that is currently ongoing against President Trump. Following the Public testimonies from Lt. Col Alexander Vindman and other Capitol Hill officials, the implications for financial markets could be massive, as per the experts.
Simply put, the recent events have surely highlighted that the uncertainty has not yet been ruled out of the U.S – China trade war that has continued for over a year.