China’s trade with US shrinks as tariff war worsens

BEIJING — China’s trade with the United States is falling sharply as the two sides prepare for more negotiations with no sign of progress toward ending a worsening tariff war that threatens global economic growth.

Imports of U.S. goods fell 22% in August from a year earlier to $10.3 billion following Chinese tariff hikes and orders to companies to cancel orders, customs data showed Sunday.


Exports to the United States, China’s biggest market, sank 16% to $44.4 billion under pressure from punitive tariffs imposed by President Donald Trump in a fight over Beijing’s trade surplus and technology ambitions.

Beijing is balking at U.S. pressure to roll back plans for government-led creation of global competitors in robotics and other industries. The United States, Europe, Japan and other trading partners say those plans violate China’s market-opening commitments and are based on stealing or pressuring companies to hand over technology.

U.S. and Chinese tariff hikes on billions of dollars of each other’s imports have disrupted trade in goods from soybeans to medical equipment and battered traders on both sides.

Chinese exporters also face pressure from weakening global consumer demand at a time when Beijing is telling them to find other markets to replace the U.S.


China’s politically sensitive trade surplus with the U.S. narrowed to $31.3 billion in August from $27 billion a year earlier.

China’s global exports fell 3% to $214.8 billion, while imports were up 1.7% at $180 billion. For the first eight months of 2019, exports were off 1% from a year earlier and imports were down 5.6%.

China’s global trade surplus rose 25% from a year earlier to $34.8 billion. Exports to the European Union rose 3% from a year earlier to $38.3 billion.

U.S. and Chinese negotiators are preparing for talks in October, later than initially planned, but neither side has given any sign of offering concessions that might break a deadlock over how to enforce a deal.

Beijing says Trump’s punitive tariffs must be lifted once an agreement takes effect. Washington says some must stay to ensure Beijing carries out any promises it makes.


The decision to go ahead with talks despite the latest tit-for-tat tariff hikes on Sept. 1 encouraged global financial markets.

In their latest escalation, Washington imposed 15% tariffs on $112 billion of Chinese imports and plans to hit another $160 billion on Dec. 15. That would extend penalties to almost everything the United States buys from China.

Beijing responded by imposing duties of 10% and 5% on a range of American imports. More increases are due on Dec. 15 in line with the U.S. penalties.

U.S. tariffs of 25% imposed previously on $250 billion of Chinese goods are due to rise to 30% on Oct. 1.

China has imposed or announced penalties on an estimated $120 billion of U.S. imports. Some have been hit with increases more than once, while about $50 billion of U.S. goods is unaffected, possibly to avoid disrupting Chinese industries.

Beijing also has retaliated by canceling purchases of soybeans, the biggest single U.S. export to China.

The Chinese government has agreed to narrow its trade surplus with the U.S. but is reluctant to give up development strategies it sees as a path to prosperity and global influence.

Some analysts suggest Beijing is holding out in hopes Trump will feel pressure to make a more favorable deal as his campaign for the 2020 presidential election picks up. Trump has warned that if he is re-elected, China will face a tougher U.S. negotiating stance.

/atm

source: business.inquirer.net

Huawei debuts latest advanced chipset for smartphone

BERLIN  — Chinese tech giant Huawei unveiled its latest advanced chipset Friday ahead of the upcoming launch of its latest flagship smartphone, even as uncertainty hangs over whether the device can use Google’s Android.

Huawei’s consumer business CEO, Richard Yu, showed off the Kirin 990 chipset at the IFA consumer electronics fair in Berlin on Friday.

Optimized for new 5G networks and packing 10.3 billion transistors into its fingernail size, the Kirin 990 will be the brain powering the Mate 30 phone.

Huawei, the world’s No. 2 smartphone maker, plans a global launch for the phone in Munich, Germany, on Sept. 19.


But with the U.S.-China trade war raging, it’s unclear whether the device can use the Android operating system. Sanctions bar U.S. companies from selling technology to Huawei without government approval, though there are 90-day exemptions for a narrow list of products and services.

Yu revealed little about the Mate 30 as he showcased the company’s other products. He touted the new chip’s lower energy use and superfast 5G download speed.


“This is the latest semiconductor technology,” he said.

Huawei has developed its Kirin line of chips to power some of its phones and reduce reliance on U.S.-based Qualcomm Corp.’s Snapdragon and other foreign suppliers. It has also built its own operating system, Hongmeng, though executives have said they hope to be able to keep using Android.


The U.S. and China are locked in tech and economic rivalry, with Washington pressuring allies to ban Huawei, the world’s biggest supplier of telecom gear, from new 5G networks.

Beijing on Friday lambasted the U.S. opposition to Huawei after Vice President Mike Pence this week called on Iceland and other governments to find alternatives.

Foreign Ministry spokesman Geng Shuang accused American leaders of “abusing the concept of national security” to block Chinese commercial activity.

source: technology.inquirer.net

In escalating trade war, US consumers may see higher prices

WASHINGTON  — The United States and China on Sunday put in place their latest tariff increases on each other’s goods, potentially raising prices Americans pay for some clothes, shoes, sporting goods and other consumer items before the holiday shopping season.

President Donald Trump said U.S.-China trade talks were still on for September. “We’ll see what happens,” he told reporters as he returned to the White House from the Camp David presidential retreat. “But we can’t allow China to rip us off anymore as a country.”

The 15% U.S. taxes apply to about $112 billion of Chinese imports. All told, more than two-thirds of the consumer goods the United States imports from China now face higher taxes. The administration had largely avoided hitting consumer items in its earlier rounds of tariff increases.

But with prices of many retail goods now likely to rise, the Trump administration’s move threatens the U.S. economy’s main driver: consumer spending. As businesses pull back on investment spending and exports slow in the face of weak global growth, American shoppers have been a key bright spot for the economy.

“We have got a great economy,” said Sen. Pat Toomey, R-Pa. “But I do think that the uncertainty caused by volatile tariff situation and this developing trade war could jeopardize that strength, and that growth, and that is, I think, that’s a legitimate concern,” he told ABC’s “This Week.”


As a result of Trump’s higher tariffs, many U.S. companies have warned that they will be forced to pass on to their customers the higher prices they will pay on Chinese imports. Some businesses, though, may decide in the end to absorb the higher costs rather than raise prices for their customers.

In China, authorities began charging higher duties on American imports at midday Sunday, according to employees who answered the phone at customs offices in Beijing and the southern port of Guangzhou. They declined to give their names.

Tariffs of 10% and 5% apply to items ranging from frozen sweet corn and pork liver to marble and bicycle tires, the government announced earlier.

After Sunday’s move, 87% of textiles and clothing the United States buys from China and 52% of shoes will be subject to import taxes.

On Dec. 15, the Trump administration is scheduled to impose a second round of 15% tariffs — this time on roughly $160 billion of imports. If those duties take effect, virtually all goods imported from China will be covered.

The Chinese government has released a list of American imports targeted for penalties on Dec. 15 if the U.S. tariff hikes take effect. In total, Beijing says Sunday’s penalties and the planned December increases will apply to $75 billion of American goods.

Washington and Beijing are locked in a war over U.S. complaints that China steals U.S. trade secrets and unfairly subsidizes its own companies in its drive to develop global competitors in such high-tech industries as artificial intelligence and electric cars.

“I give the president credit for challenging China on some of its really egregious behavior” on intellectual property and technology transfers, for example, Toomey said. He said he hopes that’s what Trump’s focus is, “not just the fact that Chinese clothing and shoes are popular among consumers. That’s not the problem.”

If China changes its behavior “in a meaningful way in that area … then we will have ended up in a better place. That’s what I’m hoping for. But let’s be honest. In the meantime, we’re doing damage. It’s a double-edged sword,” he said.

To try to force Beijing to reform its trade practices, the Trump administration has imposed import taxes on billions of dollars’ worth of Chinese imports, and China has retaliated with tariffs on U.S. exports.

“It’s a good thing taking on China. Unfortunately, he’s done it the wrong way,” said AFL-CIO President Richard Trumka said on “Fox News Sunday.”

“To take on China there has to be a multilateral approach. One country can’t take on China to try to dry up its overcapacity because they just send it through to you in other ways,” he said.

Trump has insisted that China itself pays the tariffs. But in fact, economic research has concluded that the costs of the duties fall on U.S. businesses and consumers. Trump had indirectly acknowledged the tariffs’ impact by delaying some of the duties until Dec. 15, after holiday goods are already on store shelves.

A study by J.P. Morgan found that Trump’s tariffs will cost the average U.S. household $1,000 a year. That study was done before Trump raised the Sept. 1 and Dec. 15 tariffs to 15% from 10%.

The president has also announced that existing 25% tariffs on a separate group of $250 billion of Chinese imports will increase to 30% on Oct. 1.


That cost could weaken an already slowing U.S. economy. Though consumer spending grew last quarter at its fastest pace in five years, the overall economy expanded at just a modest 2% annual rate, down from a 3.1% rate in the first three months of the year.

The economy is widely expected to slow further in the months ahead as income growth slows, businesses delay expansions and higher prices from tariffs depress consumer spending. Companies have already reduced investment spending, and exports have dropped against a backdrop of slower global growth.

Americans have already turned more pessimistic. The University of Michigan’s consumer sentiment index, released Friday, fell by the most since December 2012.

“The data indicate that the erosion of consumer confidence due to tariff policies is now well underway,” said Richard Curtin, who oversees the index.

Some retailers may eat the cost of the tariffs. Target confirmed to The Associated Press that it warned suppliers that it won’t accept cost increases arising from the China tariffs. But many smaller retailers won’t have the bargaining power to make such demands and will pass the costs to customers.

Philip Levy, chief economist at the San Francisco freight company Flexport who was an adviser in President George W. Bush administration, said it’s hard to say for sure when the latest tariffs may hit U.S. customers in the form of higher prices.

But, he added, “If you had to pick a time to do it, this is the worst possible time” because it’s when the bulk of holiday goods are brought into the country.

source: business.inquirer.net

Asian shares tumble as US-China trade war renews uncertainty

TOKYO – Asian shares tumbled Monday after the latest escalation in the U.S.-China trade war renewed uncertainties about global economies, as well as questions over what President Donald Trump might say next.

Japan’s benchmark Nikkei 225 started plummeting as soon as trading began and stood at 20,234.87 in the morning session, down 2.3%.

Australia’s S&P/ASX 200 slipped 1.5% to 6,427.20. South Korea’s Kospi lost 1.7% to 1,916.14.

Hong Kong’s Hang Seng dropped 3.3% to 25,309.37, while the Shanghai Composite was down 1.2% at 2,862.87.


Stephen Innes, managing partner at Valour Markets in Singapore, compared the difficulty of assessing the volatile market situation to reading tea leaves.

“Nobody understands where the president is coming from,” he said, adding that the best thing Trump can do for market stability is to “keep quiet.”


“The problem that we’re faced right now is that we are making a lot of assumptions ahead of the economic realities.”

The market is now dominated by fears of a portending U.S. recession, although the American economy is actually holding up, and much of the U.S. economy is made up of consumption, Innes said. If interest rates come down, he added, consumer spending is likely to go up, working as a buffer for the economy.

“What the market’s really waiting for is for them to drop interest rates,” Innes said. “Right now, we are still sitting on that uncertainty.”

The Dow Jones Industrial Average plunged more than 600 points Friday after the latest escalation in the trade war between the U.S. and China rattled investors. The broad sell-off sent the S&P 500 to its fourth straight weekly loss.

The tumbling began after Trump responded angrily on Twitter following China’s announcement of new tariffs on $75 billion in U.S. goods. In one of his tweets he “hereby ordered” U.S. companies with operations in China to consider moving them to other countries — including the U.S.


Trump also said he’d respond directly to the tariffs — and after the market closed he delivered, announcing that the U.S. would increase existing tariffs on $250 billion in Chinese goods to 30% from 25%, and that new tariffs on another $300 billion of imports would be 15% instead of 10%. Those announcements are likely to influence stock markets in Asia when trading opens there Monday.

The ongoing trade dispute between Washington and Beijing, and especially its unpredictability, is certain to have damaging effects on Asia. The unpredictability affects the real decisions central banks make on fiscal policy and companies make on their strategies and investments, setting off ripples of uncertainty.

Zhu Huani of Mizuho Bank in Singapore said what he called Trump’s “tariff tantrum” was setting off “the sense that tariffs could continue to rise,” with the “the unpredictability of timing and extent of these trade actions risk accentuating the paralysis of business decisions and big-ticket business spending.”

The S&P 500 fell 75.84 points, or 2.6%, to 2,847.11. The index is now down 4.5% for the month. It’s still up 13.6% for the year. The Dow lost 623.34 points, or 2.4%, to 25,628.90. The average briefly dropped 745 points. The Dow has had five declines of 2% or more this year, with three of them coming this month. The Nasdaq gave up 239.62 points, or 3%, to 7,751.77. The Russell 2000 index of smaller company stocks skidded 46.52 points, or 3.1%, to 1,459.49.

Trump also said Friday morning that he was “ordering” UPS, Federal Express and Amazon to block any deliveries from China of the powerful opioid drug fentanyl. The stocks of all three companies fell as traders tried to assess the possible implications.

The price of benchmark crude fell 71 cents to $53.46 a barrel. It sank $1.18, or 2.1% to settle at $54.17 a barrel Friday, as traders worried that the latest escalation in the trade battle could sap global demand for energy. Brent crude oil, the international standard, fell 63 cents to $58.71 a barrel.

The dollar fell to 105.24 Japanese yen from 106.65 yen Friday. The euro strengthened to $1.1145 from $1.1057. /gsg

source: business.inquirer.net

Fear on Wall Street of an Economic Slowdown

U.S. stocks fell broadly in midday trading Wednesday as central banks around the world cut interest rates and increased fears that global growth is being crimped by the U.S.-China trade war.

Every major U.S. index fell and put stocks back on a course for losses after briefly breaking a six-day losing streak on Tuesday. The losses eased as the day progressed, though investors remained in a defensive mode and headed for relatively safe holdings.

Bond prices spiked again, sending the yield on the 10-year Treasury down to 1.64% from 1.74% late Tuesday, a large move.

Yields are at their lowest level in nearly three years. That benchmark yield has retreated from its recent high of 3.23% last November as expectations of economic growth have steadily faded.


“The Treasury market is trading much higher this morning as investors continue to seek a safer haven, completely unsure as to what may happen next,” Kevin Giddis, head of fixed income capital markets at Raymond James wrote in a report.

Banks sustained some of the worst losses. Lower bond yields mean lower interest rates on mortgages and other kinds of loans, which mean lower profits for banks. JPMorgan Chase fell 3.1% and Bank of America fell 3.3%.

The dimming expectations for global growth also send the price of crude oil sharply lower. Benchmark U.S. crude plunged 4.5% at $51.20 a barrel. That helped pull energy sector stocks lower. Occidental Petroleum gave up 3.3%.

Big technology stocks, longtime investor favorites, also posted hefty losses. IBM lost 1.8%.

Safe-play stocks, including consumer staples and utilities, held up far better than the rest of the market.

The S&P 500 index fell 0.5% as of 11:12 a.m. Eastern time. The Dow Jones Industrial Average fell 238 points, or 0.9%, to 25,790. It was down as much as 589 earlier.

The Nasdaq fell 0.1%

China on Monday allowed its currency, the yuan, to weaken against the U.S. dollar in response to U.S. threats to add more tariffs to Chinese goods.

China stabilized the yuan on Tuesday and that helped lift U.S. stocks a day after they endured their worst day of the year. The volatile trading has already put a dent in the major indexes yearly gains. The S&P 500 is down 3.8% for August.

Central banks in New Zealand, India, and Thailand cut key interest rates on Wednesday and investors around the world fear that the escalating trade war between the U.S. and China will severely damage global growth.

After the surprise interest-rate cuts, bond yields sank around the world as investors scrambled for safety. They also poured into gold, which jumped to its highest price in more than six years.

“There is almost a paranoia amongst central bankers to avoid any potential financial hiccups that might hurt the real economy and cause a slowdown,” Jefferies strategist Sean Darby wrote in a report.

U.S. stocks have been on a wild ride since Jan. 22, 2018, when Trump first imposed tariffs on solar products and washing machines to help U.S. manufacturers, but they’re virtually back to where they started.

The S&P 500 closed at 2,832.97 that day and has since been down as much as 17% and up as much as 7%, with moves often driven by waxing and waning worries about the trade war. On Wednesday morning, the S&P 500 sat at 2,862.45, up 1% from that early 2018 starting point.

Since Trump tweeted in March 2018 that “trade wars are good, and easy to win” after raising tariffs on steel and aluminum, the S&P 500 is up 6.3%, though that gain has nearly halved in the last couple weeks as worries about the trade war have surged.

A key gauge of fear in the marketplace surged 6.2%. The VIX index, which measures how much traders are paying to protect themselves from swings in the S&P 500, was still below where it was at the start of the year when recession fears were surging, but it’s close to its highest level of the year.

European and Asian indexes were mixed.

Disney fell 5.1% after disappointing investors with a sharp third-quarter profit plunge that fell far short of Wall Street forecasts.

The entertainment company said underperformance from its Fox movie and TV studio helped weigh down the fiscal third-quarter financial results. It bought Fox’s entertainment business in March for $71 billion.

Match Group shares jumped 25.2% after the operator of Tinder, OkCupid and other dating sights beat Wall Street’s second-quarter earnings forecasts. The company reported a surge in Tinder subscribers and raised its revenue forecast for the year.

Drugstore operator CVS Health rose 6% after swinging to a second-quarter profit and handily beating Wall Street forecasts. The company attributed part of the gains to health insurer Aetna, which it bought for $69 billion in November.

source: usa.inquirer.net

China tells India: Let’s fight together against Trump’s unilateralism, protectionism

NEW DELHI — China says it values India’s concerns on the bilateral trade imbalance between the two Asian giants and is willing to discuss new approaches to address the issue, and has asked New Delhi to join Beijing in its fight against “unilateralism and protectionism” amidst a bruising trade war with the United States.

India for long has been pressing China to open its pharmaceutical market for Indian pharma exports to address the yawning trade deficit which last year according to Chinese figures, crossed US$ 57 billion in a $ 95.5 billion trade.

China’s new Ambassador to India Sun Weidong said: “China highly values India’s concerns on trade imbalance. But I have to point out that we have never deliberately pursued a trade surplus against India.”

China for its part, Sun said, has taken measures to increase import of rice and sugar and accelerated the process of review and approvals of Indian pharmaceuticals and agricultural goods.

He said latest figures show that China’s imports of Indian goods grew by 15 per cent and more Indian goods have found their way to the Chinese market.

India’s export of agricultural goods to China last year actually doubled, he said. “According to the statistics in the first half this year, India’s trade deficit against China is down by five per cent. So, I am convinced that with the concerted efforts the issue of trade imbalance between India and China will be gradually addressed,” he said.


“China and India have various channels for dialogue to talk about issues like trade imbalance. We are willing to discuss and find new approaches to address the trade imbalances with our Indian friends,” he said.

Sun also asked India to join China in the fight against unilateralism and protectionism, a reference to US President Donald Trump’s policy using tariffs as a weapon to assert his America first policy.

Trump kicked off a trade war with China last year by slapping 25 per cent duties on more than $ 250 billion of Chinese imports, demanding Beijing to reduce massive trade deficit which climbed to over $ 539 billion.

There has been a trade friction between India and the US on several issue. India wants foreign companies to store data locally and announced a review of the rules around e-commerce, moves that alarmed U.S. technology and financial giants.

Without directly referring to China’s current trade war with the US and India’s trade frictions with America, Sun said: “We are facing unprecedented challenge that is unseen in a century”. “We are both faced with the challenges from unilateralism and protectionism. So, we have to resolutely defend the multilateralism and economic globalization and stand against unilateralism and protectionism,” he said.

Without directly referring to concerns in India over China’s big push into South Asia with huge investments in Nepal, Bangladesh and Sri Lanka, Sun referred to Beijing’s proposal in the past for a China-India Plus approach to address the issues involving these countries.

source: newsinfo.inquirer.net

Trade tensions torpedo oil, US sanctions hammer Russian rouble

SYDNEY — Asian shares were subdued on Thursday after a new round of tit-for-tat tariffs in the US-Sino trade conflict torpedoed oil prices, while the Russian rouble tumbled as the US slapped fresh sanctions on the country.

MSCI's broadest index of Asia-Pacific shares outside Japan barely budged as caution dominated. Japan's Nikkei slipped 0.5 percent, not helped by a shock slump in core machinery orders.

Early Thursday, China's state broadcaster said China must counteract US tariffs and Beijing had the confidence to protect its own interests as well as the means to do so.

China had already announced additional tariffs of 25 percent on $16 billion worth of US imports from fuel to autos. The tariffs will apply to billions of dollars in U.S. gasoline, diesel and other oil products, though not crude.

Analysts at ANZ noted there were also reports President Xi Jinping had asked China's major oil companies to increase domestic output to safeguard the country's energy security.

The oil market took the news hard with selling escalating as major technical levels broke.

US crude was last down 12 cents at $66.82 per barrel, having shed 3.2 percent on Wednesday, while Brent was off 2 cents at $72.26.

On Wall Street, trade-sensitive industrial companies were the biggest drag on the Dow, with declines led by Boeing and Caterpillar Inc.

The Dow fell 0.18 percent, while the S&P 500 lost 0.03 percent and the Nasdaq added 0.06 percent.

More sanctions

In currency markets, the Russian rouble sank after Washington said it would impose fresh sanctions because it had determined that Moscow had used a nerve agent against a former Russian agent and his daughter in Britain.

There were also reports of a new US Senate bill that would impose widespread sanctions on Russia for election meddling.

The rouble duly slid to its lowest since late 2016, with the dollar buying 65.50 roubles having jumped 3.4 percent overnight.

The pound skidded to its lowest against the dollar and euro in almost a year as fears grew Britain might leave the EU without a deal on trade with Brussels.

Traders reported a significant increase in investors hedging against a 'no-deal' Brexit, an event which could send sterling into free fall and hurt the economy by raising trade barriers with the UK's biggest export market.

Sterling was last trading at $1.2877, having dropped 0.4 percent overnight.

The Japanese yen seemed to be catching a bid as a traditional safe haven, with the dollar easing to 110.81 yen after stretching as high as 111.44 on Wednesday.

The euro was relatively steady at $1.1611, while the dollar index was a shade firmer at 95.098.

The New Zealand dollar shed 0.9 percent to a two-year trough at $0.6682 after the country's central bank took a dovish turn, pledging to keep rates at record lows well into 2020.

The Reserve Bank of New Zealand (RBNZ) said rates were likely to be on hold for longer and cut its forecasts for economic growth this year and next. —Reuters

Financials weigh on Wall Street as tariff worries return

U.S. stocks fell on Thursday, weighed down by financials, as worries of a trade war between the United States and China were heightened after President Donald Trump proposed 25 percent tariffs on $200 billion worth of Chinese imports.

U.S. Trade Representative Robert Lighthizer said Trump directed the increase from a previously proposed 10 percent duty because China has refused to meet Washington's demands and has imposed retaliatory tariffs on U.S. goods.

Beijing responded to the new threat saying it was ready to escalate the trade war.

Financials fell 0.6 percent, as JP Morgan and Bank of America dropped 0.6 percent each.

The Federal Reserve kept interest rates unchanged on Wednesday, but characterized the economy as strong, keeping the central bank on track to increase borrowing costs in September.

"Markets are substantially weaker as investors are spooked out by the latest development in the trade battle," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

"Economic strength is evident and the jobs market is strong, but the trade war is creating turbulence for investors and trading is expected to be choppy, volatile and could easily change direction."

The technology sector dropped 0.18 percent. Microsoft fell 0.6 percent, the biggest drag on the sector.

The so-called FAANG group of stocks — Facebook, Apple , Amazon.com, Netflix and Google-parent Alphabet — dropped between 0.4 percent and 0.8 percent.

Chipmakers, whose major clients include Chinese companies, also declined, with Micron, Nvidia, AMD and Intel down between 0.5 percent and 1.2 percent.

Shares of trade-sensitive companies such as Caterpillar , Boeing and 3M fell more than 1 percent and weighed on the bluechip Dow Jones Industrial Average.

At 9:54 a.m. ET the Dow Jones Industrial Average was down 131.61 points, or 0.52 percent, at 25,202.21, the S&P 500 was down 9.43 points, or 0.34 percent, at 2,803.93 and the Nasdaq Composite was down 13.06 points, or 0.17 percent, at 7,694.22.

Eight of the 11 major S&P sectors were lower.

Tesla jumped 10 percent after the electric car maker convinced investors that it was able to produce positive cash flow and turn a profit.

DowDuPont's 2.8 percent drop, was the biggest drag on the S&P 500, after the chemical producer reported quarterly results.

Shares of TripAdvisor and Cognizant slipped 14.7 percent and 5 percent respectively, after their earnings failed to impress investors.

Declining issues outnumbered advancers for a 1.49-to-1 ratio on the NYSE and a 1.52-to-1 ratio on the Nasdaq.

The S&P index recorded five new 52-week highs and four new lows, while the Nasdaq recorded 43 new highs and 50 new lows. — Reuters

China minister says trade war with US would be ‘disaster’

BEIJING — China said Sunday that it will not initiate a trade war with the United States, but vowed to defend its national interests in the face of growing American protectionism.

“There are no winners in a trade war, and it would bring disaster to our two countries as well as the rest of the world,” Minister of Commerce Zhong Shan said at a briefing on the sidelines of China’s annual parliamentary session.

“China does not wish to fight a trade war, nor will China initiate a trade war, but we can handle any challenge and will resolutely defend the interests of our country and our people,” he said.

It was Beijing’s latest statement on “problems in Sino-US economic trade and cooperation,” alluding to President Donald Trump’s plan to impose heavy tariffs on imported steel and aluminum.

The US leader said Thursday that he was slapping tariffs of 25 percent on imported steel and 10 percent on aluminum, temporarily exempting big steel producers Canada and Mexico.

Chinese leaders have threatened in the past to retaliate against raised trade barriers, but have yet to take direct action following Trump’s announcement.

Citing Chinese researchers, Zhong said the US has been overstating its trade deficit with China by about 20 percent every year. He gave no details on how this figure was reached, but the US and Chinese governments generally report widely differing trade figures because Beijing counts only the first port to which goods go instead of their final destination.

The US reported a $375 billion deficit with China last year, so a 20 percent reduction would still be among the largest trade gaps that the US has with any country.

Zhong blamed the trade imbalance in part on controls over US high-tech exports to China, repeating a Chinese claim that Washington could narrow its trade deficit if it allowed China to buy more “dual use” technology such as supercomputers and advanced materials with military applications.

US officials have said such sales would make up only a few percent of the deficit while possibly threatening American national security.

The Trump administration earlier approved higher tariffs on Chinese-made washing machines, solar modules and some other goods, prompting Beijing to accuse Washington of disrupting global trade regulation by taking action under US law instead of through the World Trade Organization.

Liu He, Chinese President Xi Jinping’s top economic adviser, visited Washington earlier this month in an attempt to smooth strained ties.

Zhong said China would continue to “relax market access” to China and said China would also attach greater importance to intellectual property right, another point of tension with the US.

China absorbed $136.3 billion in foreign investment last year. The country has long been among the top global destinations for investment, but foreign enthusiasm is cooling. Surveys by business groups show companies are shifting emphasis to other Asian economies seen as more profitable or less restrictive.

“We have noticed that some foreign-funded businesses have complained about China’s investment environment,” Zhong said. “The fact that they have complaints indicates that they are still paying attention to China’s development and have confidence in China’s market.”

The commerce minister reiterated Premier Li Keqiang’s promise on Monday to liberalize the manufacturing industry and expand the opening up of sectors such as medical care, education and new energy vehicles. Specific details were not given, but Zhong pledged to give equal treatment to domestic and foreign businesses alike while continuing to curb “irrational overseas investment” from within China.

source: business.inquirer.net