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Trump praised the prospects of a trade war with China

28 June, 2018, 04:58 | Author: Melinda Barton
  • Republican presidential candidate Donald Trump gestures while delivering a speech at the Alumisourse Building in Monessen Pennsylvania.—Rueters

Those meetings are aimed at reassuring both allies that Washington's regional defence commitment remains unchanged after Trump unexpectedly announced on June 12 that the U.S. would suspend a major joint military exercise in South Korea following his meeting with Kim.

Trump administration officials are denying reports that the United States is readying limitations this week on Chinese investment in American technology companies and high-tech exports to China.

On Wall Street, the Dow Jones Industrial Average .DJI fell 328.09 points, or 1.33 percent, to 24,252.8, the S&P 500 .SPX lost 37.81 points, or 1.37 percent, to 2,717.07, and the Nasdaq Composite .IXIC dropped 160.81 points, or 2.09 percent, to 7,532.01.

US technology stocks were worst hit.

American tariffs on foreign goods have threatened domestic supply chains and foreign manufacturing strategies for USA multinationals, and they've prompted retaliatory tariffs from trade partners expected to stunt global sales for US companies. Some U.S. steel and aluminium tariffs went into effect in April and additional tariffs begin in July.

Trump infuriated USA allies-from the European Union to Canada and Mexico-last month by imposing tariffs of 25 percent on imported steel and 10 percent on aluminum. At one point Monday, the Dow fell nearly 500 points.

Global stocks have been whipsawed in recent sessions as investors grapple with conflicting signals from senior officials in the Trump administration on future trade policy between the world's two biggest economies. China's alliance with their volatile neighbor is longstanding; North Korean leader Kim Jong Un met with President Xi Jinping after his summit with Trump in Singapore earlier this month.

The technology sector serves a major role in both the Chinese and USA economies.

"People are scared", said Wayne Kaufman, chief market analyst at Phoenix Financial Services in NY. "The rhetoric is getting stronger rather than weaker". "It's bad for growth", he said.

The U.S. will present North Korea with a series of requests and a specific timeline for various phases of the denuclearization, said the official, who spoke on condition of anonymity to discuss internal communications.

The administration could expand the existing authority of the Committee on Foreign Investment in the United States, or CFIUS, which is led by the Treasury and which already has blocked Chinese investments, in ports and semiconductors. It said the controls would be announced by June 30 and would "be implemented shortly thereafter".

Liu He, vice premier of China's State Council, said in a speech quoted by Japan's Kyodo news agency: "Both sides agree to firmly oppose unilateralism and protectionism and prevent such practices from impacting the world economy or even dragging the world economy into recession".

Spokespersons for the Treasury, Commerce Department and the White House did not immediately respond to Reuters' requests for comment on the proposed restrictions.

Beijing agreed to narrow its multibillion-dollar trade surplus with the U.S. by purchasing more American goods but scrapped that after Trump went ahead two weeks ago with a tariff hike on $34 billion of imports.



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