The trade dispute between the United States and China showed no sign of resolving on Monday after U.S. President Donald Trump imposed 10 percent tariffs on nearly $200 billion of Chinese imports. The tariffs are currently set to rise to 25 percent as of January 1, 2019. For the moment the tariffs exclude Apple products and other consumer goods, but other important items were caught in the tariff “crossfire”, including hardware related to cloud computing, computer servers and networking. Parts used to make semiconductors were also hit. Analysts worry that duties on these electronic parts will have a direct impact on U.S. businesses and on pricing of related services, though many big brands are currently exempt from the taxes.
China has threatened to retaliate with tariffs on the U.S. agricultural, a move which President Trump has announced will prompt him to put additional tariffs on $267 billion of additional goods. If this expansion comes to life, nearly all major brands, including Apple, will be directly affected. Last month China released a proposed list of tariffs on $60 billion of U.S. goods, not limited to agricultural products, including natural gas.
Though Washington has said that it remains open to trade negotiations, China has said that further escalations will stall the process, and may result in further escalations.
Stock Markets React
All three major U.S. stock indexes fell on Monday, with the NASDAQ seeing the biggest losses. The index closed down 1.43 percent. Apple shares sunk 0.7 percent in after-hours trading.
Asian trading on Tuesday was mixed. Chinese indexes were higher, with the Shenzhen Composite up 0.92 percent and the Shanghai Composite up 0.49 percent as of 2:05 p.m. HK/SIN. Japan’s Nikkei 225 was up 1.60 percent in the late afternoon. Leading the losses was Australia’s ASX 200 which was down 0.54 percent. Hong Kong’s Hang Seng Index eased 0.52 percent.