Trump could hit France with more tariffs in battle over taxes on big tech
The Trump administration is scheduled to decide next week whether to retaliate against France for a new digital services tax that hits American technology giants like Amazon and Facebook. Countermeasures against the tax could include tariffs on French imports.President Trump has sharply criticised steps by European allies to crack down on the technology sector.Visit Business Insider's homepage for more stories.
Events of the past few days have demonstrated, again, how sensitive financial markets are to Donald Trump’s tweets and comments on tariffs.
Those markets have been unsettled by the prospect Trump raised on Tuesday of a deferral of any deal with China until after next year’s presidential elections.
Trump rediscovered his love of tariffs this week, announcing on Monday he would impose them on Brazilian and Argentinian steel and aluminium exports and, in retaliation for France’s digital services tax, introduce a 100 per cent duty on $US2.4 billion ($3.5 billion) of French products.
S&P 500 falls toward biggest drop in nearly 2 months
Stocks dropped Monday, the first trading day of December, as investors assessed disappointing manufacturing data along with the latest trade news after capping a month that featured blistering gains. The Dow was down more than 200 points. The S&P 500 pulled back 0.7%, heading for its biggest one-day loss since Oct. 8, while the Nasdaq traded 1% lower. The major averages started off the session with slight gains before turning lower.Shares of Facebook, Amazon, Alphabet, and Apple all dropped more than 1%. Netflix traded 2.7% lower. Roku, which has been one of the hottest stocks of 2019, plummeted more than 15%.
That has shaken up markets in the past couple of days but Trump went further in London on Tuesday when he told reporters that he had no deadline for the "phase one" trade deal with China that was previously supposed to be close to finalisation and which would have halted the escalation in that trade conflict.
"If it’s not going to be a good deal I’m not signing a deal, he said.
"It can’t even be an even deal. If it’s an even deal it’s no good."
He went further, suggesting that it might be better for the US to wait until after next November’s presidential election to agree a deal.
Trump just slapped tariffs on Brazil and Argentina to try and dig himself out of a problem he created
President Trump announced on Monday that he's imposing new steel and aluminium tariffs on Brazil and Argentina. In a tweet, Trump blamed both nations for devaluing their currencies, and hurting American farmers in the process.
"I like the idea of waiting until after the election for the China deal. But they want to make a deal now and we’ll see whether or not the deal is going to be right. It’s got to be right," he said.
That comment left a crucial question hanging. On December 15 the US is scheduled to introduce tariffs for the final $US160 billion (AUD$233b) of China’s exports to the US that haven’t yet been levied.
Those goods – items like smartphones, laptops, toys and children’s apparel – are the most consumer-sensitive of China’s exports, which is why the administration, which announced them in August, delayed their introduction to avoid impacting the lead-up to Christmas. By December 15 retailers should have acquired their Christmas stock before the tariffs raised their costs.
If there is to be no deal with China until next year - potentially the end of next year - does that mean the December 15 tariffs will be levied as scheduled?
ASX sinks as Donald Trump threatens to impose tariffs on Brazil and Argentina metal imports
Australian shares tumble after US President Donald Trump decides to widen his trade war by reinstating tariffs on steel and aluminium imported from Brazil and Argentina.By 1:25pm (AEDT), the ASX 200 had fallen by a steep 138 points, or 2 per cent, to 6,724.
If they were it would come as a significant shock to markets that have consistently adopted an optimistic view of the outcome of the trade war.
US Commerce Secretary Wilbur Ross supported the Trump view that there are no time pressures on the negotiations with China and also said the final round of tariffs would go ahead of December 15 unless there were "some real reason to postpone them."
The US stockmarket has fallen sharply and US bond yields have dived this week in response to the new uncertainties Trump has injected into the outlook for, not just the confrontation with China, but US trade relationships with other major trading partners.
The markets are stretched by conventional standards, held up by the absence of alternatives that generate positive returns. They are acutely sensitive to every development in Trump’s trade disputes, which probably means that a decision to go ahead with the December tariffs and an indefinite deferral of a truce with China would really rattle investors.
The US-China trade relationship and the $US360 billion (AUD$ 526b) of US tariffs already in place – and China’s retaliatory measures – have adversely impacted global growth and the US economy itself. More tariffs and a broadening of trade conflicts beyond China would have an even deeper effect on real economies.
Trump calls Macron comments on NATO 'insulting' and 'nasty'
Trump calls Macron comments on NATO 'insulting' and 'nasty'"NATO serves a great purpose," Trump told reporters during a meeting with NATO Secretary General Jens Stoltenberg in London. "I think that's very insulting.
The European Union has said it will respond with its own retaliatory measures if the US follows through with its threat to punish France for its digital services tax and there’s also the prospect that Trump will reactivate his interest in a broader range of tariffs on European Union products, most particularly its auto exports, if European markets aren’t opened up to US exporters.
Trump’s love affair with tariffs and the cloak of "national security" that he has used to deploy some of them could also see them used as leverage in non-trade disputes, with the US president suggesting on Tuesday that he might deal with NATO allies who don’t lift their defence spending "from a trade standpoint."
Until this week it appeared the administration wanted to settle its dispute with China before the start of the election year, putting the more difficult issues it has with the way China manages its economy aside in order to get a deal that, even if it involved rolling back some existing tariffs, it could present as a victory.
In just a couple of days Trump has sowed confusion about the future direction of trade with his grab-bag of actions and threats, accusing Brazil and Argentina (falsely) of currency manipulation, pledging to levy duties on French exports, raising the prospect that there will be no deal with China in the near term (and perhaps even more tariffs) and then suggesting he might use tariffs as leverage in non-trade disputes.
It’s little wonder China, America’s own allies and financial market participants are bemused and disturbed by the erratic and unconventional nature of the administration’s policy announcements and the way Trump delivers them via tweets and free-wheeling, off-the-cuff and often contradictory statements.
Trump signs off on deal to pause China trade war .
The two sides have reportedly reached a deal days before another round of tariffs was due to start.The deal could be announced as soon as Friday, after US President Donald Trump reportedly signed off on the terms.