China trade war over tariffs sends global markets crashing

The Dow Jones Industrial Average down more than 700 points after being down 500 points with half an hour to go. Indicating that they would retaliate against tariffs announced by President Donald Trump.

China is preparing a response to Trump’s planned taxes and will stand up to protectionism, but it hopes for dialogue, China’s ambassador to the WTO said. The Chinese Ministry of Commerce described USA decision as a serious violation of the regulations set up by the World Trade Organization (WTO) and also Chinese interests, while announcing that the case would be brought to WTO. The 15 day delay in implementation and a 30 day comment period mean there is an opportunity for dialogue and a negotiated solution. While China is the largest steel producer in the world, those tariffs will potentially affect metals produced in several countries.

On Thursday, investors fled stocks and bought bonds, which sent bond prices higher and yields lower.

Losses for chipmakers pulled technology companies lower and banks also fell.

The fear rippled into Asia, where shares tumbled in early trading.

The yield fell further on Friday to 2.792 percent, its lowest in six weeks.

MSCI’s broadest index of Asia-Pacific shares outside Japan ended nearly flat, a 1-per-cent drop in Chinese and Hong Kong stocks offsetting gains elsewhere.

Australian stocks lost 1.65 percent and Japan’s Nikkei dropped 1.9 percent.

Meanwhile, Beijing has responded by listing 128 USA imports- including fruit, wine, and steel pipes, that it would place tariffs on worth up to $3 billion. Agriculture and technology are other major sectors where the Asian superpower may plan to hit back on US’ $130 billion annual exports to China.

On Thursday, markets sank. The Nasdaq Composite dropped 87.81 points, or 1.2 per cent, to 7,257.47.

The market also considered economic reports released Friday.

Germany’s DAX lost 1.8 percent and the French CAC-40 fell 1.4 percent.

China is America’s biggest creditor, with more than $1 trillion of Treasury bonds.

JP Morgan Asset Management Hannah Anderson, global market strategist said, “the equity market will bear the brunt of the market reaction”.

Peterson says growers in North Dakota and nationwide are concerned that the 60 billion dollars in tariffs the Trump administration announced yesterday on Chinese goods may result in China looking elsewhere to fill their soy needs.

“This whole thing with tariffs is going to drag on and create uncertainty”, INTL FCStone analyst Edward Meir said.

“The right way to solve the imbalance is to open the market wider to each other and make the pie of bilateral cooperation bigger, instead of launching trade wars“, the spokesperson said.

“The economic impact on both China and the USA will be determined by what form the tariffs end up taking”.

The dollar fell to 105.61 yen from 106.10 yen. Investors later booked profits to leave the yen up 0.1 percent at 105.19 yen per dollar.

Oil futures rallied. Benchmark U.S. crude rose 95 cents to $65.27 a barrel in electronic trading on the New York Mercantile Exchange.

The price of oil climbed $1.20, or 1.9 percent, to $65.60 a barrel in NY.