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Stock Market Sinks as US, China Trade War Fears Ramp Up

Stock Market Sinks as US, China Trade War Fears Ramp Up

Wall Street certainly is anxious he has.

On Wall Street, the stock market buckled on the prospect of an all-out trade war between the world's two biggest economies.

"However, imposing taxes on products used daily by American consumers and job creators is not the way to achieve those ends".

Hopes that Tuesday's gains in USA equity markets would lead to a more lasting rebound foundered the S&P 500, Nasdaq 100 and Dow all slumped alongside both the Stoxx Europe 600 Index and the MSCI Asia Pacific Index.

But as CBS2's Alice Gainer reported, the fears aren't gone yet.

And the $3 billion in US products that Beijing targeted Monday amount to barely 2 percent of American goods exported to China.

However, if Beijing wanted to make concessions to Washington, which has called for China to reduce its trade surplus with the United States by US$100 billion, it could do so by boosting its purchases of American chips, according to a recent report by Financial Times, citing people familiar with the matter.

Nevertheless, the descent into a trade war between the world's two largest economies poses wide macro-economic risks.

"We have to export".

"Disregarding strong representations by China, the United States announced the tariff proposals that are completely unfounded, a typical unilateralist and protectionist practice that China strongly condemns and firmly opposes", according to the statement.

"You're going to have a lot of sectors of the United States economy in places that have been fairly supportive of the president where they will all the sudden start to feel some pain - and that's deliberate", says Phil Levy, senior fellow at the Chicago Council on Global Affairs.

"I assume a good portion of it is negotiating tactic". Joni Ernst, R-Iowa, said.

"Risk of further escalation remains and global financial markets will be the collateral damage until cooler heads emerge", said Norman Chan, chief investment officer at Oreana Private Wealth. "That's our hope", said Secretary of Agriculture Sonny Perdue. "Nothing concrete has actually happened; these are proposals", Trump economic adviser Larry Kudlow said on Fox Business Network on Wednesday.

However, experts warn that 2018 could be a different story, calling a trade war between the two gargantuan economies increasingly likely. "This is about holding to the laws and the customs of free trade and holding violators to account", he said.

These recent actions have raised fears of a global trade war and have rattled investors' sentiment as witnessed by last week's sharp drop in global equity markets. We can not let this continue! Officials signaled that the implementation of the proposed measures would depend on when the US applied its own, and that there was still time for both sides to agree to a settlement. China could turn to other markets to satisfy its needs if the U.S. is belligerent.

U.S. chemicals, some types of aircraft and corn products are among the goods facing the taxes, China's finance ministry said.

The unpredictability of the US government and its economic policies also adds uncertainty to the global economy and affects the manufacturing trends of China and the world, "but these unfavorable factors will not affect China's overall growth momentum", Zhou said. People do not seem willing to have such consultations to address the issues in a constructive way, in a mutual and beneficial way. Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big.

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