Global financial market plunges southward with Trump’s threat to China

Latest threat of President Trump for China was not welcomed global financial markets and so stock prices on Monday opened sharply lower in the United States.

The president said more tariffs could be imposed on Chinese products if trade deal is not reached with Beijing in a week.

The Dow Jones Industrial Average was down over 450 points and the Shanghai composite index too moved southward by 5.6 percent.

Trump tweeted Monday, “The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!”

However, as the day wore on the markets moved up signaling the threat could be a negotiating poly.

The two countries are locked in trade negotiations for past few months. US wants China to address intellectual property theft, currency manipulation and government business subsidies.

Meanwhile, Chinese officials are scheduled to visit Washington on Wednesday to resume the negotiations.

The two countries are locked in trade negotiations for past few months. US wants China to address intellectual property theft, currency manipulation and government business subsidies.

Senior professor of trade policy at Cornell University, Eswar Prasad, said the negotiations will not be about imposing additional tariffs.

He added, “The complication right now is that the Chinese cannot afford domestically to be seen as cravenly giving in to U.S. demands, which in the Chinese narrative are multiplying by the day.”

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Paul Linus

Paul Linus is a professional writer associated with several online news media houses. He writes on international politics and business. He can be reached here - knowledgeherald@gmail.com
Paul Linus

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