Listen Live
    In this Monday, Aug. 13, 2018, photo, a man stands near a poster depicting a mural of U.S. President Donald Trump stating that all American costumers will be charged 25 percent more than others starting from the day president Trump started the trade war against China, on display outside a restaurant in Guangzhou in south China's Guangdong province. The recent trade war between the world's two biggest economies has forced many multinational companies to reschedule purchases and rethink where they buy materials and parts to try to dodge or blunt the effects of tit-for-tat tariffs between Washington and Beijing

    Chinese Markets Unfazed by US Tariff Hike Amid Trump's Threats on Trade

    © AP Photo / Color China
    Business
    Get short URL
    5355
    Subscribe

    Washington's move to raise tariffs from 10 percent to 25 percent on $200 billion worth of Chinese goods took effect on Friday, with Beijing expressing its disapproval of the decision and warning that it would be forced to retaliate.

    News of a fresh spike in US tariffs on Chinese imports had little impact on Chinese stocks and the yuan, which ended on a high note in Friday trading, China Daily has reported, citing market data.

    The benchmark Shanghai composite index rose 3.1 percent to 3,939.21 points, with the Shenzhen component and composite jumping by 4.03 percent and 3.8 percent, respectively, closing at 9,235.39 and 1,568 points, respectively. The ChiNext index, China's NASDAQ-equivalent style board of growth enterprises gained 4.38 percent, closing at 1,533.87 points.

    China's yuan faced more modest gains, climbing 0.2 percent to 6.81 per dollar but still down 1.13 percent for the week, its worst performance against the US currency since July 2018.

    The gains, which followed a slump earlier in the week which saw the Shanghai composite index and CSI300 blue chip index lose between 4.5-4.7 percent of their value, were said to have been led by the technology sector, including 5G Wireless technology, homegrown microchips and software.

    However, Jasper Lawler, head of research at London Capital Group, attributed the gains to expectations that Chinese and US officials would return to talks on Friday. "The fact that the two sides have agreed to continue negotiations on Friday is offering a glimmer of hope that the relationship between the two powers hasn't deteriorated beyond repair," Lawler said, speaking to Reuters.

    For his part, Dennis Lam, an equity analyst at UBS in Hong Kong, said the market has already "partially factored in [an] increase in tariffs from 10 to 25 percent" after having "a couple of days to look at this scenario. More importantly, these negotiations are still ongoing. There is no concrete evidence that things will get a lot worse," he added.

    Jim McCafferty, head of Asia research at Nomura Securities, told CNBC that he expected the Chinese government to "get a little bit bored with these antics" by the US, "because China's government is really about planning. It's very hard to plan when you've got this erratic partner in the US which is changing its mind every few days."

    Fresh US tariffs targeting $200 billion worth of Chinese exports to the US took effect on 12:01 ET on Friday, with the Chinese government expressing "deep regret over the development" and promising to take the "necessary countermeasures," without specifying what these might be.

    In a press statement, China's Ministry of Commerce expressed hope that the US "will meet us halfway and work with us to resolve existing issues through cooperation and consultation".

    Meanwhile, Vice Premier Liu He, China's top trade negotiator, will take part in a second day of talks with US officials on Friday. Earlier, Liu said he hoped "to engage in rational and candid exchanges with the US side" on the subject, adding that raising tariffs was not a solution.

    Trump Reiterates Threat to Put Tariffs on All Chinese Goods

    On Friday morning, President Trump tweeted that the US had begun a process "to place additional tariffs at 25% on the remaining $325 billion dollars" of China's trade with the US, while emphasising that "talks with China continue in a very congenial manner," and arguing that the tariffs had an automatic benefit for the US.

    Related:

    US-China Trade Dispute Negative For World Economy - French Finance Minister
    Trump Tells Trudeau US Backs Ottawa’s Effort to Free Canadians From China
    China 'Fully Prepared' for Any US Actions Related to Tariffs
    Trump Says Beijing Broke Trade Deal During US-China Talks
    China to Conduct More Cyber Attacks Against US - Pompeo
    US Faces Broader Risks Due to China Trade War, Should Stick to WTO Rules – Fox
    Analysts Suggest US Lacks Political Will for Nuclear Deal With China, Russia
    Tags:
    trade talks, reaction, market, economy, trade, Liu He, Donald Trump, China, United States
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik