After a week of intense tit-for-tat moves between US and China, all the global investors, marketers and corporations were wishing for was a deal, to stabilise the trade markets. But US another threw another shocker at the world on Friday saying that it is not ready for deal.
On Friday, while holding a press briefing at the White House, US President Donald Trump told reporters, We’re doing very well with China. We’re talking with China. We’re not ready to make a deal – but we’ll see what happens.”
His statements also signalled that the next round of talks between American and Chinese diplomats, scheduled for September, might get cancelled. As with regard to September talks Trump said, “We’ll see whether or not we keep our meeting in September.”
The trade war between two of the mightiest economies has being now going on for over a year. US blamed China for following discriminatory trade polices, not opening its market to US traders on equal grounds as Chinese and violating intellectual property rights. In order to push Beijing to create a level playing field, Washington imposed 25% tariffs on $250 billion of US imports from China. Since then the tariff tiff between the two only went up.
The most intense episode of the trade war was witnessed last week when Trump administration announced new tariffs on remaining Chinese imports worth $300 billion, to be executed from September 1. It virtually puts tariff on all the goods imported from China. China retaliated by depreciating its currency, as the People’s Bank of China made the yuan drop below 7 against the US dollar. It is the lowest it has slipped in over a decade. The last it dropped beyond 7 was during 2008 crisis.
The global trading market was among the worst hit amid the recent escalation, causing major sell-off of the global stocks, worst being experienced by the Wall Street. Post Trump’s Friday statement sent the US stocks further low. The uncertain market scenario would leads to investor anxiety, causing heavy capital outflows, and leaving the entire world markets in bearish state.