Tech stocks hit as Trump mulls fresh $200bn tariffs on China
The Trump administration late last night ratcheted up its trade war with China by imposing tariffs on $200bn (£152bn) more of the world’s second largest economy’s goods starting next week.
The tariffs will start at 10 per cent, rising to 25 per cent on 1 January, allowing US companies some time to adjust their supply chains to alternate countries.
The tariffs will increase prices on consumer goods ranging from handbags to bicycle tyres. Apple’s Watch, Fitbit Trackers and other consumer gadgets will be spared from the latest round of tariffs, a senior administration official said in a last-minute reprieve for the tech industry.
President Donald Trump, in a statement announcing the new round of tariffs, warned that if China takes retaliatory action against US farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267bn of additional imports”.
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“It will be a lot of money coming into the coffers of the United States of America. A lot of money coming in,” Trump told reporters at the White House ahead of the announcement, Reuters reported.
US tech stocks slid yesterday before the announcement, with tech firms taking the biggest hit. The tech-heavy Nasdaq Composite index dropped 114.25 points, or 1.43 per cent, to 7,895.79. Netflix was the biggest loser yesterday, trading 3.9 per cent down at $350 when markets closed, followed by Amazon which was 3.2 per cent down at $1,908. Apple was 2.7 per cent down at $217.88, Google-owner Alphabet lost 1.5 per cent and was trading at just under $1,160, while Facebook was down one per cent to around $160.
The US had already imposed tariffs on $50bn of Chinese imports.
Trump initiated the fight to punish Beijing for what he says are China’s predatory tactics to try to supplant US technological supremacy.
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