Published: Mon, September 10, 2018
Money | By Ralph Mccoy

Asian markets sink on fresh trade fears after Trump remarks

Asian markets sink on fresh trade fears after Trump remarks

On Friday, Wall Street stocks ended lower while world share indexes registered their biggest weekly declines in nearly six months after Trump threatened tariffs on a further US$267 billion worth of Chinese imports, on top of earlier promises to levy duties on US$200 billion worth of Chinese goods.

The trade surplus hit $31.05 billion in August and it continues to add fuel to the already heating up trade rhetoric between the U.S. and China.

A sell-off in Chinese shares pulled Asian equities to a 14-month trough on Monday as investors braced for a potentially damaging escalation in the Sino-U.S. tariff row after U.S. President Donald Trump raised the stakes in the dispute with Beijing. Hong Kong's Hang Seng index slipped 0.8 percent.

For now, that means Ford simply won't sell the vehicle in the United States.

Big quote: "Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive".

On top of that, strong numbers on Friday had bolstered bets on a higher dollar on expectations the Federal Reserve will keep raising US interest rates.

Hong Kong stocks suffered the sharpest losses, falling 1.3 percent, while Shanghai ended down 1.2 percent with news that China's trade surplus with the U.S. hit a record in August - adding to concerns Trump will push ahead with the tariffs.

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He pointed to the latest fall in China's currency, the yuan, which is now down nearly 9 percent versus the dollar since April. Beijing has threatened to retaliate against any measures out of Washington.

The auto-sector market economist Jon Gabrielsen told the Detroit Free Press that Trump's tweet was "further evidence that neither the president nor his trade representatives have any clue of the complexities of global supply chains".

Tension has also persisted over limits on USA firms' access to Chinese markets, intellectual property protection, technology transfers and investment.

Chinese shares were battered with the blue-chip index off 1.4 percent.

The Australian dollar, a proxy for emerging market growth, hovered near its lowest in 2-1/2 years. Spot gold was lower at $1,193.01.

In commodities, oil prices were firmer after three straight days of losses, with USA crude futures up 44 cents at US$68.19 per barrel.

Market prices are reflected in a glass window at the Tokyo Stock Exchange (TSE) in Tokyo, Japan, February 6, 2018.

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