China trade war affects PHL economy

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The world's most valuable publicly traded company does almost all of its manufacturing and assembly in China, the culmination of a long and complicated electronics supply chain that stretches around the world and ends with the Chinese-made iPhone you may be reading this story on. The US ignores the consensus the two sides had reached, and acts capriciously by once again provoking a trade war.

USA stocks are mostly higher Wednesday as technology and media companies lead a recovery from the turbulent trading seen the day before.

"This all shows how quickly trade tensions could escalate between the U.S. and China", said Derek Halpenny, European head of global markets research at MUFG Bank. That's after China and the USA both levied a 25 percent tariff on $50 billion worth of goods.

Beijing immediately retaliated, matching the U.S. levy.

The Japanese yen strengthened to 110.02 against the dollar, up as much as 0.47 percent on the day, after President Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods, fuelling trade war worries with Beijing.

Neither side has yet imposed tariffs on the other in their growing dispute over technology and the US trade gap; the first round is to take effect on July 6.

"Canada is not going to take advantage of the United States any longer".

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", Trump added in a statement. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong", Trump said in a statement.

USA stock markets fell sharply Tuesday, with investors increasingly nervous about the impact of the escalating fight. With concerns growing on Wall Street, the Dow Jones industrial average closed down almost 300 points - more than 1 percent - on its sixth straight losing day. The strongest is probably a consumer boycott of United States consumer goods but it can also use restrictions on investments in China by U.S. companies as there are far more USA companies in China than the other way around.

The report said housing starts spiked by 5.0 percent to an annual rate of 1.350 million in May after tumbling by 3.1 percent to a revised rate of 1.286 million in April.

China's Commerce Ministry criticised the latest threat of tariffs, saying it was an "act of extreme pressure and blackmail that deviates from the consensus reached by both parties after many negotiations, and is a disappointment to the global community".

Some U.S. producers said growing demand for U.S. energy would overcome the impact of China's tariffs just as higher oil prices this year have not slowed the global thirst for oil and natural gas.

China might be unable to match the USA tariffs because it imports much less from the United States - $130 billion in goods past year, compared with Chinese exports to the United States of $505.5 billion.

Chinese companies listed in the USA took sharp losses.

The tariffs would start to slow USA growth, economists warn.

Brent crude futures fell 0.8 percent to $74.76 a barrel after rallying 2.5 percent overnight, while USA light crude futures retreated 0.9 percent to $65.27.

The tariffs are "creating a whole new set of uncertainties on top of what's already there", Daniel Yergin, vice chairman of consultancy IHS Markit, said on Tuesday as he arrived in Vienna to attend this week's OPEC's International Seminar.

Even if the amount subject to tariffs is raised to USD150bn, our rough calculations suggest it would not reduce global GDP by more than 0.2%. The next step will be for the Office of the U.S. Trade Representative to identify the Chinese goods to be penalized and to conduct a legal review.

The initial round of penalties announced by both nations is scheduled to take effect on July 6.

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