China Customs Delays Clearing US Goods As Duties Loom

Share

Investors also shrugged off concerns over an escalating trade war between the USA and China.

The S&P 500 index rose 23.21 points, or 0.8%, to 2,759.82.

Large technology companies were among the strongest groups for a second day running, with Apple, Google-parent Alphabet and Facebook all gaining more than 1.0 percent. Many caught in the initial line of fire -U.S. farmers absorbing tariffs on their exports to China, for instance -are fearful. "Unlike the June announcement, this time it seems Beijing is looking at some of the impact on the economy if the trade war escalates further". Intermediate products, like computer chips, are expected to see an especially big impact - intermediate products account for 78.9 percent of goods exported to China.

"I think the report is more encouraging than discouraging because it suggests we have a bit more slack in the economy than we expected", said Bruce McCain, chief investment strategist at Key Private Bank.

A commodities trader in eastern Shandong province was told by customs at a major northern port that they have slowed the clearance of goods from the United States on Beijing's list. After exchanging several threats over the last few months, both the United States and China implemented a tariff of 25% on imports worth $34 billion last Friday.

China's tariff list is heavy on agricultural goods such as soybeans, sorghum and cotton, threatening US farmers in states that backed Trump in the 2016 USA election, such as Texas and Iowa. Average hourly pay rose just 2.7 percent from a year earlier, which means that after adjusting for inflation wages remain almost flat.

Singapore's DBS Bank changed its growth forecast for Korea from 2.9 percent to 2.5 percent.

The bigger problem comes when the trade war expands to other economies.

In a globalised world, no country can hope to impose tariffs without affecting its own economic interests. Of course, it remains a concern, but I believe it's more of a knee-jerk reaction than a sustained bear market.

Google's Duplex AI could soon be running call centres
According to The Information , Google has taken an interest in using Duplex to replace human workers at call centres. Googles Duplex demonstration was very likely one of the most buzzed about topics at this past Google I/O conference.

If it happened, the Trump-led economy could eventually buckle under the weight of protectionist trade policies.

Economists say that every $100bn of imports affected by tariffs would take away around 0.5% of global trade. He added that for now, "He's called the bluff of other countries that have basically been abusing" USA companies and workers.

WTO spokesman Dan Pruzin has cited concerns expressed on Twitter by WTO Director-General Roberto Azevedo about new "restrictive measures" before 25-percent USA tariffs on $34 billion worth of Chinese imports took effect.

Economic Development Minister Maxim Oreshkin said in a statement Friday that additional tariffs ranging from 25 to 40 percent have been applied to some road construction equipment, oil and gas equipment, metal processing instruments, drilling equipment and optical fiber.

Ford Motor Co (F.N) said on Thursday that for now, it will not hike prices of imported Ford and higher-margin luxury Lincoln models in China. Japan's main stock index, the Nikkei 225, gained 1.1% while the Shanghai Composite Index added 0.5%.

However, some project that the benchmark Kospi could fall to as low as 2,200 this week if the situation continues. Mr. Trump's tariffs against China will likely resonate with voters who believe in his "America First" campaign and perceive the trade deficit with China as a loss to the US economy.

As the above chart shows, China is involved in a total of 55 trade disputes, either as the complainant or responder.

Though consumer discretionary shares have been among the best performers this year, UBS analysts said import tariffs could be a worry for the retail industry.

Share