Stock Market Crash 2019-China threatened to impose additional tariffs on $75 billion of American goods including soybeans, automobiles and oil, in retaliation for President Donald Trump’s latest planned levies on Chinese imports that pushed U.S. stocks and farm commodities lower. Some of the countermeasures will take effect starting Sept. 1, while the rest will come into effect from Dec. 15, according to the announcementFriday from the Finance Ministry. This mirrors the timetable the U.S. has laid out for 10% tariffs on nearly $300 billion of Chinese shipments.
An extra 5% tariff will be put on American soybeans and crude-oil imports starting next month. The resumption of a suspended extra 25% duty on U.S. cars will resume Dec. 15, with another 10% on top for some vehicles. With existing general duties on autos taken into account, the total tariff charged on U.S. made cars would be as high as 50%.
China’s tariff threats take aim at the heart of Trump’s political support -- factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down. Soybean prices sank to a two-week low.
The move drew a sharp reaction from Trump that sent stocks tumbling further on concern the talks are falling apart. “We don’t need China and, frankly, would be far better off without them,” he tweeted. “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
We have seen further evidence of a global slowdown, notably in Germany and China. Geopolitical events have been much in the news, including the growing possibility of a hard Brexit, rising tensions in Hong Kong, and the dissolution of the Italian government,” Powell said, also mentioning one of the running salvos in Trump’s trade war with China.
“In principle, anything that affects the outlook for employment and inflation could also affect the appropriate stance of monetary policy, and that could include uncertainty about trade policy,” Powell said. “There are, however, no recent precedents to guide any policy response to the current situation.”
Federal Reserve Chairman Jerome Powell repeated his pledge Friday to keep the economic expansion going while acknowledging that tariffs and other factors are causing growth to slow. Less than an hour after the speech, President Donald Trump blasted Powell on Twitter, referring to him as “our enemy.”
Powell, while not saying specifically where he thought rates should go, promised that the Fed “will act as appropriate to sustain the expansion,” a phrase he has used several times in the recent past.
Powell also said in his annual remarks at the central bank’s Jackson Hole symposium that the “economy is close to both goals” of the Fed’s dual mandate of full employment and price stability.
“Our challenge now is to do what monetary policy can do to sustain the expansion so that the benefits of the strong jobs market extend to more of those still left behind, and so that inflation is centered firmly around 2 percent.”
He also outlined the challenges the Fed faces and indicated that for he and his fellow officials there are “no recent precedents to guide any policy response to the current situation.”
“While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade,” he said in prepared remarks. “We can, however, try to look through what may be passing events, focus on how trade developments are affecting the outlook, and adjust policy to promote our objectives.”
He did say the Fed is looking at ways to address developments in a landscape that has changed significantly since the expansion began a decade ago.
“We are examining the monetary policy tools we have used both in calm times and in crisis, and we are asking whether we should expand our toolkit,” he said.
On a broader level, Powell painted a mostly positive picture on the U.S. economy, saying it has “continued to perform well overall” while facing challenges.
“The global growth outlook has been deteriorating since the middle of last year. Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States,” he said.
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