China considering skipping the trade talks as tensions increase
The week is off to a horrible start on Wall Street after President Donald Trump on Sunday, announced that he would hike the tariffs on all goods that are being imported from China. This move by the President has shattered hopes of economists and the global community that the world’s two largest economies might actually come to a resolution to their trade war which has plagued the global economy for a while now. Post this announcement and China retaliating in a similar fashion, the markets in America have taken a considerable beating.
The Dow Jones Industrial Average futures fell by 501 points this morning this implies an opening decline of about 480 points. S&P 500 futures lost 1.8% and the NASDAQ 100 dropped by 2.2%. The fact that the repercussions of the decisions made on Sunday are hitting the American markets so hard in just a day is worrisome. Major companies shares have fallen in value in premarket trading in fear of the trade war. Apple and Caterpillar both contributors to the NASDAQ index dropped about 3% in their share value during premarket trading. Chipmakers who rely heavily on some Chinese supplies were hit especially hard with Nvidia and Advanced Micro Devices losing more than 5% of their share value. All in just the premarket trading in the early hours of Monday.
China’s stockmarkets too were not spared with many of their stock markets being hit by significant losses all by the end of their morning session since the announcement by the American president. The decision was announced officially on the President’s official Twitter handle where he announced that the current 10% tariff on the $200 billion worth of goods from China will be increased to 25% on Friday. He threatened to impose the 25% tariff on an additional $325 billion of Chinese goods “shortly”. This comes in view of his statement where he digresses that the progress of the ongoing trade negotiations is moving too slowly.