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Friday, March 29, 2024

Stocks tumble on Trump’s threat

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The stock market sank Monday, joining the rest of Asia after President Donald Trump threatened to hike tariffs on $200 billion of Chinese goods at the end of the week in a bid to speed up stuttering trade talks between the economic superpowers.

The Philippine Stock Exchange Index tumbled 105.68 points, or 1.3 percent, to 7,862.30 on a value turnover of P6.2 billion, Losers overwhelmed gainers, 146 to 56, with 35 issues unchanged.

International Container Terminal Services Inc., the biggest port operator, dropped 6.4 percent to P128, while Bank of the Philippine Islands, the third-largest lender in terms of assets, fell 3.1 percent to P83.

BDO Unibank Inc., the largest bank, declined 2.9 percent to P135, while Universal Robina Corp., the biggest snack food maker, lost 2.4 percent to P163.

President Donald Trump sent Asian and European markets plunging Monday, with Shanghai slumping more than five percent. The Chinese yuan also took a battering after the president threw a spanner into the high-level negotiations, which many observers were expecting to wrap up imminently.

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“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods,” Trump tweeted Sunday night. “The 10% will go up to 25% on Friday.”

He added: “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”

The warning will throw a shadow over the next round of talks ahead of a visit by a Chinese delegation to Washington this week.

However, while a number of news outlets reported that China was considering delaying or canceling the meeting a foreign ministry spokesman said a delegation would head to the US as planned.

Shanghai sank 5.6 percent as investors returned for the first time since Tuesday. News that the People’s Bank of China would slash the amount of cash lenders must keep in reserve, to support small businesses, had little impact in the face of Trump’s warning.

Hong Kong tumbled 2.9 percent, Singapore was off 3.1 percent and Taipei shed 1.8 percent, while Sydney dropped 0.8 percent and Wellington was one percent down.

Mumbai and Jakarta were also sharply lower. Tokyo and Seoul were closed for holidays.

The two sides have imposed tariffs on $360 billion in two-way trade since last year. But Trump and China’s Xi Jinping agreed a truce in December, fueling a global stocks surge for the past four months.

“Trump has taken the proverbial sledgehammer to the walnut this morning and the only two words likely to be on the minds of traders and investors this week are ‘trade talks’,” said OANDA senior market analyst Jeffrey Halley.

“Trade had been put to the side by many market participants,” said Andrew Tilton, chief Asia-Pacific economist at Goldman Sachs. “Market pricing assumed there would be some kind of a deal, and no further escalation in tariffs. And meanwhile, the growth outlook was actually improving,” he told Bloomberg TV. With AFP

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