Trade War Fears Roil Markets, Boost Gold Prices

Trade War Fears Roil Markets, Boost Gold Prices

Cui Tiankai, China's ambassador to the U.S., told Bloomberg on Friday that China is "looking at all options" in response to Trump's trade action.

Markets in NY tumbled through the afternoon.

The Dow shed 2.9 percent, the S&P 500 dropped 2.5 percent and the Nasdaq fell 2.4 percent on Thursday.

Perhaps unsurprisingly, the prospect of a trade war between America's capricious president and the increasingly authoritarian Xi, who recently moved to cement his role as probable president-for-life, has done little to reassure markets.

The London index partly recovered later in the session though was still 0.4% down at the close. Benchmarks in Taiwan, Southeast Asia and India also posted sizeable losses.

Tokyo's main Nikkei share index was down more than 4 percent Friday, while share indexes in Shanghai and Seoul fell by more than 3 percent, following similar declines on Wall Street overnight.

Copper fell 3 cents to $2.99 a pound.

"This can turn ugly on a global scale very quickly", Robert Carnell, chief economist for the Dutch financial services group ING Asia, wrote in a note to clients. It also wants to slap the USA with a 25 percent tariff on pork and recycled aluminum imports. Beijing promised to fight a trade war "to the end".

YDSTIE: He went on to say USA companies, the financial markets and the American middle class could be hurt. Smaller economies that supply the United States and China would be likely to bear much of the pain.

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On Thursday, Deutsche Bank sold shares in its DWS Asset Management unit on the stock exchange. That's about as much as the company was worth in in 2012, the year of its initial public offering.

The Russell 2000 index of smaller-company stocks sank 33.79 points, or 2.2 per cent, to 1,510.08, but it's flat this month while the S&P 500 is down 4.6 per cent.

President Donald Trump's plans for tariffs on up to $60 billion in Chinese goods moved the world's two largest economies closer to a trade war as China declared plans to levy duties on up to $3 billion of USA imports including fruit and wine even as it urged the United States to "pull back from the brink". But they fear that widespread U.S. tariffs, and Chinese retaliation, will raise prices significantly for Americans, hurt the economy and kill jobs.

For Europeans, the reprieve announced by the Trump administration from the protectionist measures could be brief.

US Commerce Secretary Wilbur Ross on Thursday suggested the new measures on intellectual property were a way of bringing Beijing to the table, telling CNBC they were "the prelude to a set of negotiations".

Washington this week said it would temporarily exempt Europe as well as countries including Brazil, Argentina, South Korea and Australia from the steep new steel and aluminium tariffs that Trump unveiled this month and which took effect Friday.

In addition, the White House said it might impose import quotas to prevent too much foreign metal from flooding into the United States. "Such achievements may make the U.S. feel anxious, but as the largest economy in the world, the USA is supposed to be above making groundless accusations and blowing things out of proportion". The U.S.is its second biggest. US farmers are anxious, too. "The stakes are too high and there would be no victor".

"The US should not fool itself into thinking that China can be pressured to be folded under such tactics, the newspaper added".

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