U.S. Markets closed

Trump set for China tariff announcement on Thursday, trade war fears grow

By David Chance and Steve Holland

WASHINGTON (Reuters) - President Donald Trump will announce tariffs on Chinese imports on Thursday, a White House official said, in a move aimed at curbing theft of U.S. technology and likely to trigger retaliation from Beijing and stoke fears of a global trade war.

There was no indication of the size and scope of the tariffs, which U.S. Trade Representative Robert Lighthizer said on Wednesday would target China's high-technology sector and could also include restrictions on Chinese investments in the United States. Other sectors like apparel could also be hit.

"Tomorrow the president will announce the actions he has decided to take based on USTR’s 301 investigation into China’s state-led, market-distorting efforts to force, pressure, and steal U.S. technologies and intellectual property," the official said.

The White House said Trump would sign a presidential memorandum "targeting China’s economic aggression" at 12:30 p.m. (1630 GMT) on Thursday.

The investigation by the United States under Section 301 of the 1974 Trade Act has identified theft from and coercion of U.S. companies to disclose their intellectual property as well as purchases by Chinese state funds of U.S. companies for their technology knowledge.

Lighthizer told the House of Representatives Ways and Means Committee, a top economic panel, that the aim would be to minimize the impact of any tariffs on U.S. consumers.

China has threatened to retaliate by hitting U.S. agricultural exports if tariffs on Chinese imports worth up to $60 billion are announced by Washington.

"The remedies, in my judgment at least, would be one, doing something on the tariff front, and two, doing something on the investment front, and then perhaps other things," said Lighthizer, a lawyer and veteran trade negotiator.

The United States runs a hefty goods trade deficit with China of $375 billion. Estimates of the cost of counterfeit goods, pirated software and theft of trade secrets could be as high as $600 billion, according to one study.

Talk of a global trade war emerged earlier this month when Trump announced hefty tariffs on steel and aluminium imports, aimed at hitting Chinese overproduction, but which could also affect key allies like members of the European Union.

Lighthizer conceded that China would likely hit back with measures on U.S. agricultural exports, particularly soybeans, and said if that happened, Washington would impose "counter-measures," although he said that "nobody wins from a trade war," a stance that appeared to put him at odds with Trump who has termed trade wars "good and easy to win".

Since taking office, Trump has taken a hard line on trade, abandoning a 14-nation Pacific trade pact and threatening to pull out of the North American Free Trade Agreement with Canada and Mexico.

He has also attacked Germany, saying it hides behind tariffs to win an export advantage for its car industry.

The administration has been forced to walk back some of its steel and aluminium measures, granting exemptions to Canada and Mexico and entering talks with the European Union and others to discuss potential exemptions.


CHINA STEELS ITSELF FOR RESPONSE

China has already identified agriculture as a U.S. weak point and has said it would target soybeans, a $14 billion-a- year business. America's farm states heavily backed Trump in his presidential election win.

"China does not want to fight a trade war with anyone. But if anyone forces us to fight one, we will neither be scared nor hide," Foreign Ministry spokeswoman Hua Chunying said.

"If, in the end, the United States takes actions that harm China's interests then China will have to take resolute and necessary steps to respond to protect our legitimate interests."

The European Union's response to the threat of steel and aluminium tariffs also targeted areas where Republicans are vulnerable, threatening Harley-Davidson motorcycles, which are made in House Speaker Paul Ryan's home state of Wisconsin.

While China has stepped up its rhetoric, it is far from clear that Beijing is ready to take the next step and move to an economic confrontation that would pit the world's two leading economic powers against each other.

Financial markets reacted to the Trump steel and aluminium tariffs with an initial sharp sell-off, although they have since regained their poise.

A global trade war would have much harsher economic consequences, possibly hitting the dollar, U.S. stock markets and currencies as varied as the Mexican peso and the Australian dollar, according to analysis from investment bank Morgan Stanley.

A targeted use of Section 301 that covered $60 billion of Chinese high-tech products could see a response from China that is relatively muted, the bank said in a report, with agriculture and transport equipment being hit in return,

"This would have a moderate impact on growth in both the U.S. and China," it said.

The risk of an escalation in which there were a broad-based tariff across a range of Chinese goods followed by a response from Beijing that was commensurate with that would cause a hit to U.S. and Chinese growth, a rise in U.S. inflation and possibly prompt China to take domestic action to boost growth.



(Additional reporting by David Lawder in Washington and Stella Qiu and Ryan Woo in Beijing; Editing by Alistair Bell and Peter Cooney)

  • An Intrinsic Calculation For Intersect ENT, Inc. (NASDAQ:XENT) Suggests It's 38% Undervalued
    Business
    Simply Wall St.

    An Intrinsic Calculation For Intersect ENT, Inc. (NASDAQ:XENT) Suggests It's 38% Undervalued

    Today we will run through one way of estimating the intrinsic value of Intersect ENT, Inc. (NASDAQ:XENT) by projecting its future cash flows and then discounting them to today's value. We generally believe that a company's value is the present value of all of the cash it will generate in the future. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.

  • Here's Why StoneCo Stock Is Plunging Today
    Business
    Motley Fool

    Here's Why StoneCo Stock Is Plunging Today

    Shares of Brazilian fintech company StoneCo (NASDAQ: STNE), which gained notoriety in recent months after being added to Berkshire Hathaway's portfolio, are plummeting today. Generally speaking, moves like this are often seen after earnings announcements, but StoneCo isn't set to report earnings again for another couple months. In this case, the plunge appears to be triggered by a move from a rival company.

  • One chart shows how much the Fed tightened financial conditions — and how far it still could go
    Business
    MarketWatch

    One chart shows how much the Fed tightened financial conditions — and how far it still could go

    The chart shows that the steady and slow rise in U.S. central bank interest rate hikes began to bite in 2018 and financial market conditions became less stretched. Then, in the fourth quarter, the market selloff left financial market conditions as close to restrictive as they'd been for three years. However, just as quickly, financial market conditions have eased this year, as the central bank pivoted to a “patient” monetary policy.

  • Oil prices little changed despite Saudi export cuts, U.S. stocks draw
    Business
    Reuters

    Oil prices little changed despite Saudi export cuts, U.S. stocks draw

    Oil futures held steady on Thursday as a drop in crude exports from OPEC's de facto leader, Saudi Arabia, and a draw in U.S. oil inventories supported prices, while a strengthening dollar kept futures in check. Brent crude futures were higher at $71.73 a barrel by 1:20 p.m. EDT (1720 GMT), up 11 cents from their last close and near Wednesday's five-month high of $72.27. U.S. West Texas Intermediate (WTI) crude futures were down 10 cents at $63.66 a barrel.

  • What Did Northwest Natural Holding Company's (NYSE:NWN) CEO Take Home Last Year?
    Business
    Simply Wall St.

    What Did Northwest Natural Holding Company's (NYSE:NWN) CEO Take Home Last Year?

    In 2016 David Anderson was appointed CEO of Northwest Natural Holding Company (NYSE:NWN). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Our data indicates that Northwest Natural Holding Company is worth US$1.9b, and total annual CEO compensation is US$3.2m.

  • Business
    Barrons.com

    GE Stock Got a Thumbs Up From a Mysterious 'Smartest Man'

    GE)'s beaten-down stock is up 25% year to date, and Melius Research analyst Scott Davis says the smartest industrial investor he knows is buying the shares. That's a tantalizing statement. Who is this investing star?

  • Early Pinterest investor on 30% spike in IPO debut: 'They're just getting started'
    Business
    Yahoo Finance Video

    Early Pinterest investor on 30% spike in IPO debut: 'They're just getting started'

    An early Pinterest investor comments on the company's spike in IPO debut, along with Zoom shares skyrocketing. Yahoo Finance's Zack Guzman and Kristin Myers are joined by Lauren Smith Brody, 'The Fifth Trimester' author and founder, and Talia Goldberg of Bessemer Venture Partners, to discuss.

  • Here's Why Blackstone Shares Jumped on Thursday
    Business
    Motley Fool

    Here's Why Blackstone Shares Jumped on Thursday

    Shares of Blackstone Group (NYSE: BX) climbed nearly 7% on Thursday morning after the alternative asset manager reported first-quarter earnings that blew past expectations and announced plans to convert to a corporation from a partnership. Blackstone, before markets opened, said it had earned $0.71 per share in the first quarter, easily surpassing the consensus estimate for $0.53 per share in earnings. The partnership structure has prevented some classes of investors, namely pension funds and other tax-exempt institutions, from buying shares of Blackstone, and has made the company ineligible for inclusion on certain indexes.

  • This Marijuana Stock Offers the Best Bang for the Buck
    Business
    Motley Fool

    This Marijuana Stock Offers the Best Bang for the Buck

    Companies like Cronos Group, which sports a $5.2 billion market cap, is only capable of perhaps 120,000 kilos of peak production, and is valued at north of 210 times forward earnings. Similarly, Aurora Cannabis, Canada's projected leading producer at 780,000 kilos a year at peak capacity, may not even be profitable in fiscal 2020 due to expansion costs. Yet it's lugging around an $8.5 billion valuation.

  • Is TELUS Corporation's (TSE:T) Balance Sheet Strong Enough To Weather A Storm?
    Business
    Simply Wall St.

    Is TELUS Corporation's (TSE:T) Balance Sheet Strong Enough To Weather A Storm?

    Investors pursuing a solid, dependable stock investment can often be led to TELUS Corporation (TSE:T), a large-cap worth CA$30b. This article will examine TELUS's financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself into T here.

  • 10 Reasons to Buy Twilio Stock and Never Sell
    Business
    Motley Fool

    10 Reasons to Buy Twilio Stock and Never Sell

    The number of active customers using Twilio's platform to communicate with their clients has increased four-fold in four years. Concurrently, base revenue -- which excludes low-margin professional services and customers that don't sign long-term contracts -- has exploded. All of this is to say: Twilio has been an extremely popular option over the past five years.

  • Canopy Growth strikes $3.4B deal to buy Acreage
    Business
    Yahoo Finance Video

    Canopy Growth strikes $3.4B deal to buy Acreage

    Canopy Growth stock is up today on news that it's made a deal to buy Acreage Holdings. Yahoo Finance's Zack Guzman and Kristin Myers are joined by Lauren Smith Brody, 'The Fifth Trimester' author and founder, to discuss.

  • Why Nintendo Stock Popped Today
    Business
    Motley Fool

    Why Nintendo Stock Popped Today

    What happened Shares of Nintendo (NASDAQOTH: NTDOY) were up 13.6% as of 1:30 p.m. EDT Thursday after news emerged that the company's Switch gaming console will soon begin selling in China. But Nintendo won't be selling the devices directly.

  • Why Mustang Bio Stock Is On Fire Today
    News
    Motley Fool

    Why Mustang Bio Stock Is On Fire Today

    Mustang's shares are blasting off in response to the news that an experimental gene therapy, MB-107, for "bubble boy" disease -- also known as X-linked severe combined immunodeficiency, or XSCID for short -- reportedly cured eight boys with the deadly condition. Equally critical, Mustang said that the boys are showing no signs of unintended side effects from the therapy -- an issue that has derailed prior gene therapies for XSCID. Mustang licensed MB-107 from St. Jude Children's Research Hospital.

  • What Are Analysts Projecting for AK Steel's Q1 Earnings?
    Business
    Market Realist

    What Are Analysts Projecting for AK Steel's Q1 Earnings?

    How Wall Street Views Steel Stocks ahead of Their Q1 Results(Continued from Prior Part)AK Steel's first-quarter earnings AK Steel (AKS) is expected to release its first-quarter earnings results on April 29 after the market closes. Last year was

  • Here's Why Shares of Uxin Climbed Higher on Thursday
    Business
    Motley Fool

    Here's Why Shares of Uxin Climbed Higher on Thursday

    Chinese online used-car dealer Uxin's (NASDAQ: UXIN) volatile week continued on Thursday, with shares up more than 11% as the market continues to digest, and at least for now dismiss, a critical short-seller report that temporarily sent shares crashing. Shares of Uxin lost more than half of their value midday Tuesday after J Capital Research analyst Anne Stevenson-Yang issued a report claiming that Uxin has exaggerated the volume of auto sales it processes by as much as 40%, and that founder and CEO Kun Dai was making false statements about the business' strength while taking cash out of the business. The response helped Uxin shares to recover much of what they lost on Wednesday.

  • Why Check Point Software Stock Dropped 8% Today
    Business
    Motley Fool

    Why Check Point Software Stock Dropped 8% Today

    Shares of IT security specialist Check Point Software Technologies (NASDAQ: CHKP) plunged more than 11% in early trading on the Nasdaq today before retracing to about an 8.2% loss as of 12:40 p.m. EDT. Check Point reported its fiscal first-quarter 2019 earnings this morning, but earnings weren't the problem this time -- guidance was. An earnings beat could have sent Check Point stock up today.

  • Snap Stock Downgraded Twice in 1 Day: What You Need to Know
    Business
    Motley Fool

    Snap Stock Downgraded Twice in 1 Day: What You Need to Know

    Wedbush thinks this expectation is already factored into Snap's higher share price, and therefore rates the stock only neutral, with a $12.25 price target. Downgrading Snap stock, part deux Vertical Group is even more pessimistic, observing in a note covered by StreetInsider.com (subscription required) that Snap is experiencing "stagnant" return on its investments, and cutting spending (because without returns, what's the point? in order to conserve cash.

  • Harry Boxer: Two marijuana stocks are among charts worth watching
    Business
    MarketWatch

    Harry Boxer: Two marijuana stocks are among charts worth watching

    Marijuana stocks are among our top charts to watch today. Bank of America Merrill Lynch named the company as one of three marijuana stocks to buy. The stock, after sharp year-to-date gains, has been consolidating in recent weeks, but may be on the verge of its next leg up with cannabis stocks in general.

  • Kirkland's, Inc. (NASDAQ:KIRK): What Does Its Beta Value Mean For Your Portfolio?
    Business
    Simply Wall St.

    Kirkland's, Inc. (NASDAQ:KIRK): What Does Its Beta Value Mean For Your Portfolio?

    Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk. Having said that, beta can still be rather useful.

  • Boeing 'shielded' from 737 Max order cancellations
    Business
    MarketWatch

    Boeing 'shielded' from 737 Max order cancellations

    Don't expect Boeing Co. to face a slew of order cancellations following the 737 Max debacle. Airlines, Boeing's (BA) main customers, are hungry for fuel-efficient single-aisle aircraft such as the Max, and there's a long backlog for the jet's closest competitor, Airbus SE' (FR:AIR) A320neo, analysts at Oxford Economics said in a note Thursday. “That will shield Boeing from a mass cancellation of orders,” the analysts said.

  • Some GameStop (NYSE:GME) Shareholders Have Taken A Painful 77% Share Price Drop
    Business
    Simply Wall St.

    Some GameStop (NYSE:GME) Shareholders Have Taken A Painful 77% Share Price Drop

    For example the GameStop Corp. (NYSE:GME) share price dropped 77% over five years. The falls have accelerated recently, with the share price down 42% in the last three months. While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance.

  • Kinder Morgan Delivers Solid First-Quarter Performance
    Business
    Motley Fool

    Kinder Morgan Delivers Solid First-Quarter Performance

    Kinder Morgan's (NYSE: KMI) first-quarter results came in about as expected. The solid start to 2019 has the company on pace to hit its full-year budget for cash flow. It also allowed Kinder Morgan to fulfill its promise to boost the dividend by 25%.

  • Does Agilysys's (NASDAQ:AGYS) Share Price Gain of 83% Match Its Business Performance?
    Business
    Simply Wall St.

    Does Agilysys's (NASDAQ:AGYS) Share Price Gain of 83% Match Its Business Performance?

    For example, the Agilysys, Inc. (NASDAQ:AGYS) share price is up 83% in the last three years, clearly besting than the market return of around 38% (not including dividends). Because Agilysys is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. In the last 3 years Agilysys saw its revenue grow at 3.1% per year.

  • Why Atlassian Stock Fell Thursday
    Business
    Motley Fool

    Why Atlassian Stock Fell Thursday

    The stock's decline follows the release of Atlassian's fiscal third-quarter earnings after market close on Wednesday. The quarterly report's worse-than-expected guidance for fiscal fourth-quarter non-IFRS earnings per share may have disappointed some investors. So what Atlassian's fiscal third-quarter results featured strong growth.