Stock markets remain in suspense over trade wars
Trade war in the global economy have caused more damage than good, including the currency market, and the new can only strengthen previous damage. US President, Donald trump continues to protect its market of production as it sees fit: on the eve of the White house signed a Memorandum on the introduction of levies on the import of Chinese goods. In the next two weeks will be known the full list of products under the duty, and after a month the regulations will come into force. The official version of events is that the American economy needs special conditions for the return of competitiveness.
It came to relations with China. The trade deficit with China, according to estimates by the White house, is about $400-$500 billion, it should be reduced to $100 billion Announced measures relating to tariffs on Chinese goods, can reduce the deficit by an average $50-$70 billion. Therefore, in a short time you need to wait for additional steps to narrow the trade borders unilaterally.
It concerns not only physical goods but also technologies. Chinese money at the same time restrict access to investments in companies associated with the development of technological solutions and mechanisms of their implementation. The question is how quickly will respond to these measures China itself.
The equity markets reacted to the decision of Donald trump negatively, on the eve of the DJIA index fell by 3% morning futures S&P sags 0.6%. Asian markets are also in the minor: Japanese Nikkei 225 has fallen slightly less than 5%, the Chinese CSI300 fell by 3.7%. Most likely, this is not the limit the decline in stock market indicators, because the potential risks of complications are quite high.
It is noteworthy that the foreign exchange segment has reluctantly responding. It can be regarded as the beginning of trade wars, which can lead to financial stress around the world.