Markets are nervous about the u.s.-china trade war.


Markets are nervous about the u.s.-china trade war.
Update at 4:27 PM est.
Worries and uncertainty about China’s growing trade dispute continued to affect investors on Wednesday, when markets opened sharply lower and resumed early in the afternoon.
The main U.S. stock indexes — the dow, the s&p 500 and the nasdaq — fell more than 1 percent in early trading but rebounded to close higher. The dow Jones industrial average rose 231 points, or 1 percent, and the s&p 500 closed 1.1 percent higher.
The unrest follows Beijing’s announcement on Wednesday of anti-dumping measures against U.S. products about $50 billion. It was also worth $50 billion hours after the trump administration released more details about a range of about 25 percent of Chinese goods.
U.S. trade sanctions will hurt imports of 1,300 products, from medical equipment to machinery and dishwashers. China is focused on more concentrated, fewer products, including soybeans and aircraft. This is a trade war: both sides are hurt. Investors don’t know what will happen next.
“Of course I’m worried,” said David kotok, chief economist and investment officer at Cumberland advisors. “Since we have a President and a White House and a strengthening of protectionism policy has a very long period of time, we don’t have done that for many years, the history of those who do it are not friendly, history says,” in a trade war.
The smoot-hawley tariff act of 1930 helped turn the recession into the worst depression in American history, kotok said. And he suggests investors don’t have a clear picture of “what are you going to do?” Markets do not like this uncertainty.
Retailers don’t like it either. “Tariffs are a tax on consumers and a drag on the economy,” national retail federation President Matthew shea said in a statement on Wednesday. “This whole process creates uncertainty and makes it difficult for retail companies to rely on complex global supply chains. Tariffs could hurt consumers, endanger job creation and increase the cost of doing business in the United States.
Mr. Shea urged the trump administration to work with its trading partners to pursue China’s responsibilities and to “advance targeted solutions and recognize the unintended consequences of trade protection policies.”
The goal is the key word there. Part of the reason for the market jitters, Mr. Kotok said, was the “bewildering” list of products targeted by the trump administration.
“What are the accessories made in China?” Kotak asked.
The other question that analysts and economists have asked is: why do you have to fight these trade differences in so many ways at the same time? The tariff war with China is in for more countries about the tariffs agreed on steel and aluminium, these nations annoyed a few major league, and it also happened in the United States is to renegotiate the north American free trade agreement.
The President’s new chief economic adviser, larry kudelo, made an optimistic comment on NAFTA on Wednesday. “Don’t let me here to keep pace with The Times, but I think you will see some positive news about north American free trade agreement, maintaining the north American free trade agreement and reform of the north American free trade agreement, I think the stock market will like this,” he said in an interview. A White House.
As for the scuffle with China, Mr Kotok said he hoped the trump administration would tout it. The two sides held talks for some time before the proposed tariff went into effect. He says intellectual property and other issues can be solved to avoid tariffs.
But, he adds, “hope is not an effective strategy” for investors. Selling stocks to manage risk is an effective strategy for professional fund managers. That’s part of what’s happening in the marketplace.
It is worth noting that China’s response so far has been measured. Beijing has not escalated a trade war, but it has matched the duties of the trump administration with a list of target goods. But if that is the case, analysts say, China is showing that it is ready to fight.


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