Markets calm after Trump’s trade war with China causes meltdown

US president nows says he will meet Chinese President Xi Jinping at G20 summit in Japan

Chris Riotta
New York
Tuesday 14 May 2019 21:12
Comments
Trump responds to China's retaliatory tariffs: 'This is a very positive step. I love the position we're in'

Donald Trump has described his trade war with China as “a little squabble” and said he has an “extraordinary” relationship with Chinese President Xi Jinping exactly one day after he rocked global markets with massive threats of new tariffs.

The US president also warned Beijing he would impose tariffs on an additional $300bn (£232.4bn) in Chinese goods, telling reporters on Tuesday before departing for Louisiana that he believes negotiations between both countries are “going to turn out extremely well.”

“We’re in a very strong position,” Mr Trump told media from the White House South Lawn.

Stock markets rebounded somewhat on Tuesday after China’s announcing $60bn (£46.5bn) in tariffs against US goods in response to Mr Trump’s threats spurred the Dow Jones Industrial to drop more than two per cent a day prior. The S&P 500 and Nasdaq also both rose .44 per cent and .62 per cent, respectively.

The boost was likely supported in part by Mr Trump’s statement that he expected to meet with the Chinese president at the G20 summit in Japan next month.

However, at a Tuesday briefing, Chinese Foreign Ministry spokesperson Geng Shuang told reporters he had “no information” about a possible meeting between the two world leaders at the upcoming summit.

Mr Trump has continued to post a series of tweets aimed at China over the week, saying on Tuesday that a deal would be made with Beijing “when the time is right.”

“My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn’t make any sense,” the president tweeted. “We have to be allowed to make up some of the tremendous ground we have lost to China on Trade since the ridiculous one sided formation of the WTO. It will all happen, and much faster than people think!”

He added in a follow up tweet, “In any event, China wants a deal!”

As tensions between Mr Trump and Mr JinPing continue flaring up, market analysts and even members of the White House administration are warning of the potential consequences that can arise from an escalation in the trade war.

Larry Kudlow, the president’s top economic adviser, said during an interview on Sunday “both sides will suffer” from a continued trade war between the US and China.

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Mr Trump appeared defiant yet hopeful despite the turbulent markets and China’s vows to impose new tariffs, saying this week, “We're going to be meeting, as you know, at the G20 in Japan and that'll be, I think, probably a very fruitful meeting.”

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