President Donald Trump’s latest trade war escalation against China appears to have had an immediate effect on Asian markets and the Chinese Yuan, sending both tumbling early on Monday morning.
“China’s yuan currency fell to 7.1487 to the dollar, its weakest level since early 2008 at the height of the global financial crisis,” AFP reported. “On equity markets, Hong Kong led losses, slumping more than three percent, with investors also spooked by fresh violent protests in the city that saw police use water cannon for the first time. Shanghai lost 1.3 percent and Tokyo ended the morning more than two percent off.”
Chinese Vice Premier Liu He indicated early on Monday that the communist nation was willing to negotiate with the U.S. to prevent the trade war from escalating.
Reuters reported that “Liu, China’s top trade negotiator, was speaking at a tech conference in Chongqing in southwest China” when he made the remarks.
On Friday, the U.S. imposed a new round of sanctions against China after China imposed additional tariffs on the U.S.
In a statement on Friday, the Office of the United States Trade Representative announced:
Today, China announced it will impose unjustified tariffs targeting U.S. products. In response to China’s decision, and in order to achieve the objectives of the China Section 301 investigation, President Trump has instructed the United States Trade Representative (USTR) to increase by 5% the tariffs on approximately $550 billion worth of Chinese imports. For the 25% tariffs on approximately $250 billion worth of Chinese imports, USTR will begin the process of increasing the tariff rate to 30%, effective October 1 following a notice and comment period. For the 10% tariffs on approximately $300 billion worth of Chinese imports that the President announced earlier this month, the tariffs will now be 15%, effective on the already scheduled dates for tariff increases on these imports.
Trump instructed U.S. businesses on Friday to start looking for alternatives to dealing with Chinese businesses.
“Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue,” Trump tweeted. “I won’t let that happen! We don’t need China and, frankly, would be far better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
“I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States,” Trump continued. “Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop — it didn’t. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!”