Dow Jones recovers most of its losses after Trump trade tweets
Wall Street rebounds after a volatile day of trading.
Are the US-China talks still on?
US President, Donald Trump, tweeted about possibly imposing more tariffs on China after US trade representative, Robert Lighthizer, told him that China was withdrawing from trade talks. However, there were reports that Chinese Vice Premier, Liu He, was still going to Washington to meet with US representatives. An official from the Asian nation said that the trade negotiations could change based on how the US acts before the negotiations.
‘The atmosphere of the negotiations has changed. All that depends on the attitude of the United States,’said the official.
Dan Clifton, Strategas Research’s head of policy strategy, said Trump’s threats could kickstart the US-China trade talks.
‘If this tactic is successful, the trade deal could be finished in the short run and this volatility would be an opportunity,’ said Clifton.
Jason Oxman, president of tech trade group, Information Technology Industry Council, said that he was hopeful that the two nations could reach an agreement.
‘We are optimistic generally on reaching an agreement. We're optimistic that an agreement can be mutually beneficial,’ said Oxman.
How would Chinese import tariffs affect US businesses?
The Trump Administration has already imposed 10% tariffs on $200 billion worth of Chinese imports. Trump imposed to the tariffs to try to correct the trade imbalance between the US and China and claimed the tariffs would help American businesses.
However, economists from the US Federal Reserve Bank of New York said that the 2018 tariffs hurt US businesses and consumers that buy Chinese-made goods. Researchers found that ‘US producers responded to reduced import competition by raising their prices.’
Christin Fernandez, spokeswoman for the Retail Industry leaders Association, said that raising tariffs will hurt American consumers.
‘Raising tariffs means raising taxes on millions of American families,’ said Fernandez.
Investors will monitor the US-China trade negotiations to see if Trump's tweets and diplomatic negotiations will drive the countries to resolve their trade imbalance.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Take a position on indices
Deal on the world’s major stock indices today.
- Trade the lowest Wall Street spreads on the market
- 1-point spread on the FTSE 100 and Germany 30
- The only provider to offer 24-hour pricing
Live prices on most popular markets