White House: New tariffs on China a 'purely defensive' move

White House: New tariffs on China a 'purely defensive' move

White House: New tariffs on China a 'purely defensive' move

Apple could be one of the biggest losers in a trade war between the United States and China. Smaller companies less focused on overseas trade fared better, as did dividend-paying stocks.

The Dow Jones industrials are down 291 points, or 1.2 percent, to 24,697, after dropping more than 400 points in morning trading. The S&P 500 was down 20.53 points, or 0.74 percent, at 2,753.22 and the Nasdaq Composite was down 75.37 points, or 0.97 percent, at 7,671.66.

World financial markets buckled Tuesday, a day after Trump ratcheted up the tensions by proposing a fresh batch of tariffs on Chinese products.

Oil and copper fell. Cautious investors moved money into bonds.

President Donald Trump threatened to impose a 10 percent tariff on another $200 billion of Chinese goods, and Beijing warned it would retaliate.

This move from President Trump could be counted as a countermeasure to China's decision to raise tariffs about $50 Billion on U.S products. Shares of large US companies with significant overseas business were hit especially hard. The first round is to take effect on July 6. Perhaps he is hoping that by being so erratic, he can gain more for the US. Construction equipment maker Caterpillar closely followed with a 3.6 percent drop. As a result, the Russian minister, Maxim Oreshkin, said Moscow would assert its rights as guaranteed by the World Trade Organization (WTO) to retaliate with duties against US imports.

"There's concern but there's not overall great worry at this stage", she said.

More American goods will be subjected to Canadian tariffs in the coming weeks. The losses were even heavier in Asia, where Tokyo's Nikkei 225 retreated 1.8 percent and Seoul's Kospi gave up 1.5 percent.

"In the global environment - and due in particular to this trade issue - the risks are more on the downward side and a little bit worrying", European Central Bank policymaker Jan Smets said in a CNBC interview.

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"'We still see follow-through weakness for the C-dollar".

His comments as the official Opposition calls for an emergency debate in the House of Commons over the future of the Canada-U.S. trade. China has already taken aim at some of these products, such as pork imports, as part of its response to the United States' initial steel and aluminum tariffs in March.

USA companies have an increasingly sizable stake in the fast-growing Chinese market.

The euro sank to $1.1575 from $1.1615.

After a long-sustained and ever-growing American dependence on Chinese goods became too much for Donald Trump to bear, the man of influence decided it was time for change.

US ally South Korea could be down as much as $554 million, with the majority of losses resulting from the 10% steel tariff.

But economists think China has more room to negotiate. Trump has tried to throw a lifeline to ZTE, which has been struggling to survive under US sanctions.

He also added the actions are (quote) "necessary to defend" the U.S. CVS Health jumped 4.5 percent to $70.77 after the drugstore chain and pharmacy benefits manager said it will start making home deliveries of prescriptions and other items.

The Canadian dollar averaged 75.32 cents United States, down 0.39 of a USA cent, as it continues to face the twin pressures of rising U.S. rates and trade fears, especially related to NAFTA. The yield on the USA 10-year Treasury fell to 2.88 percent from 2.92 percent. It's fallen 2.6 percent during the losing streak. The Philadelphia Semiconductor index .SOX fell 1.2 percent.

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