Stock markets take hit as China slaps U.S. with tariffs

Stock markets take hit as China slaps U.S. with tariffs
It was a rough day for North American stock markets, with big drops across the board after China slapped the U.S. with new tariffs. The tariffs apply to more than 100 U.S. products including pork — a move designed to target U.S. President Donald Trump where it hurts: his voting base.

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Stock markets take hit as China slaps U.S. with tariffs

2 thoughts on “Stock markets take hit as China slaps U.S. with tariffs”

  1. China slapped a 179% tariff tax on U.S. Sorghum products. Some countries are beginning to do business without the United States. Could this isolate the U.S. like the southern borders going up to keep out "undesirables." Iran have bowed out of the U.S. monetary system and probably other countries will soon follow suit. Britain has left the EU. Is President 45 cutting off the U.S. foot to spite its face? Will this trade war backfire on America? Time will only tell. With an exorbitant deficit surpassing $20 Trillion dollars other nations will probably begin to leave it as the U.S dollar steadily declines. This running deficit tab cannot continue to stand before it falls. This trade war can have lasting consequences on the U.S. exonomy as China is not backing. China did say before 45 opened mouth, insert foot, that they would negotiate. Is the U.S. learning a little humbleness.

  2. It isn't just the trade war. The $1.5T in extra debt beyond the structural deficit carries an extra inflation risk. The Fed has to increase interest rates to prevent inflation. This does 2 bad things to the stock market:
    1) Increasing cost of borrowing is trouble for small and medium sized businesses who would like to expand. Even if they see unmet demand, they may hold back. The growth of the economy is reduced hence future earnings hence stock values.
    2) Higher interest rates means that many will move some money into interest producing things with low risk. This takes some money out of the stock market.

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