Global stocks rally as Trump tweet eases trade war fears


"President Xi and I will always be friends, no matter what happens with our dispute on trade", Trump wrote. Taxes will become Reciprocal & a deal will be made on Intellectual Property.

US President Donald Trump slapped import tariffs of 25 per cent on steel and 10 per cent on aluminium in March.

The latest escalation comes after the USA on Tuesday said it would impose 25 percent duties on $50 billion of imports from China, and China quickly retaliated by listing $50 billion of products that it could hit with its own 25 percent tariffs.

Accounting for only 2.9 percent of steel and aluminum exports to the U.S., China ranks tenth on the list of all exporters of these products to the U.S. The largest exporters are Canada at 16.7 percent, Brazil at 13.2 percent and South Korea at 9.7 percent.

Investors across the globe are bracing for uncertain markets over an escalating trade dispute between the USA and China.

U.S. tariffs on China include many parts that go into products, like bolts.

White House trade adviser Peter Navarro told NBC's Meet the Press that "we're moving forward in a measured way".

Xi's speech comes as the USA and China have threatened tariffs on more than a hundred of billion of goods, bringing the world's two largest economies to the brink of a trade war. Japan, the European Union and other Western economic powers that share our complaints against China could join the United States in pressing its case.

"And from Donald Trump's initial intention, it was not to trigger the trade war, but using the trade war as a bargaining chip to force China to open the domestic market".

It added that China needed to be prepared to fight the trade war "with all resources".

"If the trade dispute escalates or lasts for a long time, it will have a big impact on China's manufacturing industry, and foreign investment in related projects will be affected too", said Zhang Lifan, a Beijing-based independent political commentator. Within 24 hours of President Trump's announcement of significant tariffs on Chinese goods, the Chinese government responded with a retaliatory tariff on over one hundred American goods.

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"We're absolutely willing to negotiate", Treasury Secretary Steven Mnuchin said Friday on CNBC, adding, "I'm cautiously optimistic that we'll be able to work this out".

On the flipside, China's imposition of $50 billion of tariffs on U.S products, while a large number, is a small figure compared to the overall value of the U.S.

The White House announced after markets closed Thursday that Trump had instructed the Office of the United States Trade Representative to consider whether $100 billion of additional tariffs would be appropriate and, if so, to identify to which products they should apply.

"The decision makers, government officials and scholars from the two countries all know that if a trade war does start between the two, there is no victor - only losers", Zhang said.

"We are on a unsafe downward spiral and American families will be on the losing end", Mr Shay added in a statement, urging Mr Trump "to stop playing a game of chicken with the USA economy".

Bigger problems can arise if costs for companies go up because of the tariffs. The best way to strengthen our negotiating position with China is to re-engage with trading partners in that region, specifically those in the Trans-Pacific Partnership (TPP).

"We can not flex too much of our importing muscle, even if our exports face consequences of trade war and are subjected to tariff barriers".

They urged caution, however, noting that "this is clearly a live issue though with further comments from the U.S. administration on Thursday".

Addressing industry chamber CII's annual meeting here on Monday, Prabhu also said the current challenges posed to globalisation and the multilateral trade system could be turned into opportunities for India with the help of a "well thought out strategy". And he sought to head off concerns that protectionist trade policies would disrupt the growth of the US economy.