Wall St stocks fall as yuan slide inflames US-China ‘trade war’ | News

Wall Street‘s major indexes posted their biggest percentage drop of the year, as China‘s devaluation of the yuan sparked fears of further escalation of the US-China trade war, with the American president accusing Beijing of “currency manipulation”.

Late on Monday, the US Treasury Department labelled China a “currency manipulator”, a decision that could pave the way for possible sanctions against Beijing. The last time the United States put China on the currency blacklist was in 1994.

The series of actions sank all three major US stock indexes at closing on Monday, with the Dow Jones industrial average shedding as much as 961 points, or nearly three percent, before recovering to close at 767 down.




The Trump doctrine: Tariffs first, negotiate later | Counting the Cost

The S&P 500 also lost 87 points to notch its biggest one-day percentage decline since December 4, amounting to a $766bn paper loss, according to Refinitiv data. The Nasdaq Composite also dropped 278 points.

The yuan weakened past the seven-per-dollar level, its lowest in 11 years, after the People’s Bank of China, with the blessing of policymakers, set its daily midpoint at the weakest level in eight months.

On social media, US President Donald Trump angrily called China’s action a “major violation” and “currency manipulation”.

Several investors viewed the move in the yuan as a direct response to Trump’s announcement of 10 percent tariffs on an additional $300bn Chinese imports.

The extra 10 percent duties Trump plans to implement from September 1 would mean he has now targeted virtually all of the roughly $550bn in goods America buys from China every year.

‘Escalation of trade war’

“It’s the escalation of the trade war,” said Steven DeSanctis, equity strategist at Jefferies in New York.

“The dollar strengthening presents another issue. For companies that do a lot of business outside the US, it all adds up.”

A weaker yuan and a stronger dollar pose challenges for US companies that do substantial business in China by effectively raising the cost of their goods for Chinese customers.




Could the US-China trade talks collapse?

Adding to the tensions, China’s Commerce Ministry said Chinese companies have stopped buying US agricultural products, and that China will not rule out imposing import tariffs on US farm products that were bought after August 3.

Stocks could slide further if there are no signs of improvement in US-China trade relations before September, when the recently announced tariffs are to take effect, said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.

Al Jazeera’s Alan Fisher, reporting from Washington, DC, said that the trade war will cost billions of dollars for American farmers.

“If China targets the American farmers, then that makes it much more politically difficult for Donald Trump to manoeuvre,” he said.


SOURCE:
Al Jazeera and news agencies

Source

more recommended stories

  • Twelve dead in Boko Haram Niger attack: Official | News

    A night raid blamed on Boko.

  • North Korea test-fires missiles again after joint drills end | North Korea News

    North Korea fired two suspected short-range.

  • Amazon burning: Bolsonaro prepares to send army as outrage grows | Brazil News

    Under increasing international pressure to contain.

  • Canada bars consulate staff from travelling outside Hong Kong | Canada News

    The Canadian consulate in Hong Kong.

  • Ghana: Homecoming for African Americans | slavery

    Accra, Ghana – Afia Khalia Tweneboa.

  • Empty buses in Bangladesh as no Rohingya turn up for repatriation | News

    Cox’s Bazar, Bangladesh – Ambia is.

  • Hong Kong police in standoff with protesters after sit-in | News

    Hong Kong riot police faced off.

  • Baffled Danes mock Trump after he scraps trip over Greenland | News

    President Donald Trump‘s decision to call.

  • Two killed in first Kashmir gun battle since lockdown began | India News

    Two people, including a police official.

  • Trump slammed for saying any Jew voting Democratic is ‘disloyal’ | USA News

    Activists, politicians and many within the.

  • Kashmir tensions: ‘War is not a solution’ | Kashmir News

    There is brewing conflict between nuclear-armed.

  • Indonesia’s Jokowi urges calm after violent West Papua protests | Indonesia News

    Indonesian President Joko Widodo has sought.

  • Danish PM: Trump’s idea of buying Greenland is ‘absurd’ | News

    Denmark‘s prime minister has said Greenland is.

  • Iran tanker departs after Gibraltar rejects US demand | Iran News

    The Iranian oil tanker at the.

  • Iceland bids farewell to first glacier lost to climate change | News

    With poetry, moments of silence and.

  • Former Malaysian PM Najib Razak in court for money laundering | Malaysia News

    Former Malaysian Prime Minister Najib Razak.

  • Blast at wedding in Afghan capital wounds at least 20: hospital | Afghanistan News

    An explosion has ripped through a.

  • Sudan protest leaders, military sign transitional government deal | News

    Sudan‘s main opposition coalition and the.

  • Tlaib won’t visit West Bank under ‘oppressive’ Israeli conditions | Israel News

    US congresswoman Rashida Tlaib has said.

  • Brother of Afghan Taliban leader killed in Pakistan mosque blast | Afghanistan News

    The brother of Afghan Taliban leader.

  • Malaysia to question Zakir Naik as government weighs deportation | News

    Kuala Lumpur, Malaysia – The Malaysian.

  • Gibraltar Supreme Court says Iranian tanker is free to sail | News

    Gibraltar’s Supreme Court has ruled that.

  • Pehlu Khan lynching: Indian state to appeal acquittal of accused | News

    A provincial government in India has said.

  • Japan’s Abe skips Yasukuni shrine visit but sends offering | News

    Japanese Prime Minister Shinzo Abe has.

  • Analysis: Saudi activist rejects release deal | Saudi Arabia News

    Saudi women’s rights activist Loujain al-Hathloul.

  • Blast strikes military base in Iraq’s Baghdad | Iraq News

    At least one person has been.

  • Will China run out of patience with Hong Kong protests? | Hong Kong protests

    Hong Kong’s leader Carrie Lam is.

  • Kyrgyz ex-President Atambayev was plotting coup: Security chief | News

    Former Kyrgyzstan President Almazbek Atambayev, who.

  • Opposition warns Maduro eyeing to dissolve Venezuela parliament | Venezuela News

    Venezuela’s pro-government Constituent Assembly was holding.

  • Hong Kong airport cancels Monday flights amid sit-in protest | News

    Hong Kong airport has suspended all.

  • Israel expels Filipino worker with Israeli-born son: NGO | News

    A Filipino migrant worker and her.

  • Yemeni official: UAE won in Aden, Saudi silent over ‘slaughter’ | Yemen News

    The interior minister of Yemen‘s internationally recognised.