Here's why global stocks aren't sinking despite the US tariff hike - CNBC

A global stock market sell-off started to ease on Friday despite the U.S. fulfilling a promise to ramp up tariffs on Chinese goods.

The U.S. hiked tariffs from 10% to 25% on $200 billion worth of Chinese goods at 12:01 a.m. ET Friday. In response, Beijing said it "deeply regrets" the tariff hike and would take countermeasures — though no specifics were provided.

Markets across the globe initially fell overnight but were quick to bounce back and trade higher. In Asia, mainland Chinese stocks jumped with the Shanghai composite rising more than 3%. In Europe, the pan-European Stoxx 600 traded nearly 1% higher in early deals with the German DAX up by the same amount. Stateside, Dow futures initially slipped and pointed to nearly triple-digit losses at the open, but soon recovered.

Uncertainty over trade talks will linger, but some analysts believe investors are still optimistic that the world's two-largest economies will avoid a full-blown trade war.

"Investors seemingly continue to try to cling to hope that policymakers on both sides opt to deescalate," Deutsche Bank's research strategist Jim Reid said in a note Friday.

Reid noted that President Donald Trump told reporters Thursday that a "deal is still possible," and that he had received a "beautiful letter" from Chinese President Xi Jinping.

Global stock markets have seen heavy selling this week as the tension between Washington and Beijing escalated. The Dow Jones Industrial Average has fallen more than 650 points this week, while the S&P 500 has lost about 2.5%. Global equities have seen outflows of $20.5 billion in the past week, according to new research by Bank of America Merrill Lynch said on Friday.

The recovery could also be due to markets already pricing in the tariff hike. The announcement on the increase initially came from Trump on Sunday, giving investors plenty of time to position assets in their portfolios. In addition to that, a number of analysts have also pointed out that the increase in tariffs from 10% to 25% will only really take effect in a few weeks and hence markets are anticipating a deal will come before that.

Goldman Sachs told clients in a note that there is still some wiggle room in the negotiations, which are still set to continue on Friday.

"We note that details in the notice implementing the tariff hike indicate that exports that have already left Chinese ports before May 10 will not be subject to the increase," said Goldman economist Jan Hatzius.

"This creates an unofficial window, potentially lasting a couple of weeks, in which negotiations can continue and generates a 'soft' deadline to reach a deal ... This also leaves an opportunity for the two sides to reach an agreement in the next couple of weeks, though challenges remain," he added.

Russ Mould, an investment director at London-based stockbroker AJ Bell, said the market moves could be down to investors now having real facts with the formal tariff hike, which would dispel any speculation earlier in the week.

He also explained that a China retaliation will hurt U.S. businesses and consumers and have a negative impact on the economy. He added that the finger of blame would then point to Trump for being "too aggressive," noting that he cannot afford to let this happen ahead of elections next year.

"Investors could be betting that China's retaliation could force Trump to back down and come to an amicable conclusion," Mould said in his note.

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https://www.cnbc.com/2019/05/10/stock-markets-why-equities-arent-sinking-despite-the-us-tariff-hike.html

2019-05-10 09:10:25Z
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U.S.-China Trade War Worsens, but Investors Bet on a Deal - The New York Times

Trade war? No problem.

Global markets largely rose on Friday just hours after President Trump escalated his trade war with China. The stock market in China, which sometimes gets a lift from state-run companies looking to buoy the market, led the global rise.

Futures that allow investors to bet on the performance of stocks in the United States indicated many believed Wall Street would open higher on Friday morning.

Early Friday, Mr. Trump raised tariffs to 25 percent from 10 percent on Chinese imports that are worth about $200 billion a year. He said the increase came in response to Chinese officials attempting to “renegotiate” a pact aimed at calling a trade war truce. China said it would respond with unspecified countermeasures.

Still, many investors believe the two sides can reach a deal, especially since the Trump administration effectively delayed the full brunt of the tariff increase. The Trump administration specified that it will collect the tariffs only on goods that leave China starting on Friday. That means they would not hit Chinese goods already on ships destined for the United States, though they would more immediately impact goods that are flown in.

“Our base case remains that the U.S. and China will eventually reach some kind of accord,” Mark Haefele, global chief investment officer for the Swiss bank UBS, said in a research note. “Both the U.S. and China have strong incentives to reach a deal and we do not expect a complete breakdown in negotiations.”

In China, the Shanghai Composite Index rose 3.1 percent, while the Shenzhen Composite Index rose 3.8 percent.

The Hang Seng Index in Hong Kong rose 0.8 percent.

In Japan, the Nikkei 225 index fell 0.3 percent after disappointing wage data there.

South Korea’s Kospi index rose 0.3 percent.

European markets opened modestly higher. In Germany, the DAX index was up 1 percent.

The CAC 40 index in Paris opened 0.9 percent higher.

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https://www.nytimes.com/2019/05/10/business/global-markets.html

2019-05-10 08:32:03Z
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Trump just raised tariffs on Chinese goods. China says it will hit back - CNN

The Trump administration raised tariffs on $200 billion worth of Chinese imports from 10% to 25% at 12:01 a.m. ET on Friday, according to China's Ministry of Commerce.

Beijing responded just minutes after the tariffs went into effect.

"China expresses deep regret over the development and will have to take necessary countermeasures," the Ministry of Commerce said in a statement Friday afternoon. "We hope the United States will meet us halfway, and work with us to resolve existing issues through cooperation and consultation."

Reactions in Asia markets were mixed.

Having started the day in positive territory, Japan's Nikkei Index fell nearly 1% in afternoon trading. The Shanghai Composite Index rose more than 2% and Hong Kong's Hang Seng Index was up around 1%.

A Chinese delegation led by Beijing's top trade negotiator Vice Premier Liu He arrived in Washington on Thursday for the latest round of trade talks.

Under the current circumstances, Liu said he "hopes to engage in rational and candid exchanges with the US side," Chinese state media outlet Xinhua reported.

Liu added that China believes raising tariffs is not a solution to the problems and is harmful to China, to the United States and to the whole world.

Trump's surprise move to increase tariffs startled US businesses. Importers received just five days' notice about the sudden rise in penalties.

"The tariff increase inflicts significant harm on US industry, farmers and consumers," said Jacob Parker, vice president of the US-China Business Council, a trade group that represents American companies' interests in China.

"It will decrease the competitiveness of American companies, reduce the efficiency of their global supply chains, and reverberate through the US economy. Pure and simple, this is a tax on the American consumer," he added.

The American Apparel and Footwear Association estimated that a 25% tariff on apparel imports would increase costs for a family of four by $500 a year.

The higher tariffs will be applied to relevant US-bound goods exported from China on or after Friday, according to a notice from the US Federal Register.

Talks between the two sides will resume in Washington on Friday, hours after the tariffs took effect.

Steven Jiang contributed to this report.

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https://www.cnn.com/2019/05/10/business/china-us-tariffs-trade/index.html

2019-05-10 08:11:00Z
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Tense U.S.-China Trade Talks Underway With Threat Of Tariffs Looming - NPR

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A shopper browses digital products at a market in Beijing. Trade tensions between China and the United States have grown significantly this week, after the Trump administration accused Beijing of backing down from commitments it had made in trade negotiations. Andy Wong/AP hide caption

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Andy Wong/AP

The Trump administration is poised to raise tariffs on $200 billion in imported products from China at 12:01 a.m. Friday, significantly raising the stakes in the ongoing trade dispute with Beijing.

The clock is ticking as Beijing officials are in Washington, attempting to reach an agreement that would address U.S. concerns about Chinese business practices, including intellectual property theft and state-subsidized companies.

Until last weekend, the two countries appeared to be heading toward an accord. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer indicated that a deal was in sight.

But U.S. officials said this week that China had backtracked on commitments it had made earlier. It didn't specify what the commitments were.

As a result, the Trump administration said it would increase existing tariffs on $200 billion worth of consumer and business products to 25% from 10%.

It wasn't the first time that Trump said tariffs would rise. The president threatened to increase tariffs in January and March, but the administration held off both times to give negotiators more time to make a deal.

Financial markets have fallen this week in response to the escalation of the trade dispute and the prospect of higher tariffs. The S&P 500 is on track for its biggest decline of the year. The Dow fell 138.97 points Thursday.

The tariffs are imposed when the products are brought into the United States, which means the cost is borne by importers, who can either pay it themselves or pass it on to customers. In some cases, Chinese exporters may also be persuaded to lower their prices before the goods are shipped.

Trump recently said the United States can take in $120 billion a year in tariffs, "paid for mostly by China," but economists say much of it will be paid by U.S. businesses and consumers.

The tariffs will be applied only to goods shipped after Friday. That will provide some relief to U.S. businesses that have orders in transit. And there still is more time to reach a deal; negotiators are meeting in an attempt to do that.

Wednesday, Trump seemed to hold out hope that an agreement could still be reached to prevent the tariff hikes, noting that he had received a "beautiful" letter from Chinese President Xi Jinping.

"I have no idea what's going to happen," Trump said.

In China, some economists said the trade war would slow the country's economic growth and the government may need more economic stimulus to soften the blow.

The Chinese government controls media in the country and has been steadily working to prevent the public from seeing news that Trump threatened more tariffs by removing content from social media sites.

"I don't know much about what's going on," a 45-year-old man named Jo Jiun Hwei told NPR this week. "I think it's the American president's fault. That's what they're saying on the news at least."

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https://www.npr.org/2019/05/09/721893765/tense-u-s-china-trade-talks-underway-with-threat-of-tariffs-looming

2019-05-10 00:02:00Z
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James Carafano: North Korean missile test – Here's the critical thing Trump needs to do now - Fox News

According to an old adage (it’s old because I made it up, and I’m getting old), “If your negotiating strategy with North Korea is based on knowing what the North Koreans are thinking, you are going to fail.” The regime remains as inscrutable and opaque as ever.

That said, the Trump administration has to ask itself what to make of Pyongyang’s recent series of provocative actions, including another missile test. Believe it or not, though, the best answer might be: Why does it matter?

On the surface, these actions seem to be finely calibrated. They’re provocative enough to get Washington’s attention, but not threatening enough to provoke a strong U.S. response.

NORTH KOREA FIRES 2 SHORT-RANGE MISSILES, 5 DAYS AFTER PREVIOUS LAUNCH; US TESTS LONG-RANGE MISSILE WITHIN 10 MINUTES

The DPRK may still be clinging to the belief that Trump needs a deal for his re-election. It might be hoping these actions will cause him to come scurrying back to placate them.

Certainly, North Korean officials feel their demonstrations are putting pressure on the South Koreans. President Moon’s popularity is declining. Perhaps they think he will do more to pressure the U.S. to take off, well, some of the pressure.

All of this, of course, should be taken simply as speculation. No one is living rent-free in the leader of North Korea’s head. Kim has his own ideas about how to deal with the West.

That’s why from the start, Trump’s pressure campaign and reliance on deterrence and missile defense made sense. The U.S. strategy protects us and our allies. We’re not dependent on Kim’s course to protect our vital interests.

Thus, the most important step to take in response to Kim’s latest steps is to keep the pressure on. Wisely, that’s what the administration looks to be doing.

It’s also understandable that Trump insists on leaving the way for negotiations to denuclearization open. That’s a deal worth having. The U.S. loses little by keeping the diplomacy option open.

Further, despite all the doubters and the apoplectic press in Korea and the U.S., the fact remains that the allies are standing together. Washington, Seoul, and Tokyo are of one mind on the ultimate goal here.

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The U.S. also isn’t complacently waiting. Washington has an ongoing initiative; they just aren’t telling us what it is. Meanwhile, the Japanese prime minister, with U.S. backing, has also agreed to meet with Kim.

The smart play now for the U.S. is don’t panic. Keep up the pressure campaign. This not only sends a strong signal to North Korea but also a message to Iran as well: The U.S. won’t concede something for nothing, least of all when the other side pitches a fit.

CLICK HERE TO READ MORE FROM JAMES CARAFANO

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https://www.foxnews.com/opinion/james-carafano-north-korea-missile-test-trump

2019-05-09 15:22:44Z
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Venezuela's opposition vow to defy Maduro after key figure detained - The Guardian

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1. Venezuela's opposition vow to defy Maduro after key figure detained  The Guardian
2. After failed military uprising, No. 2 leader of Venezuelan congress is towed to jail in car  Fox News
3. A frustrated Trump questions his administration’s Venezuela strategy  The Washington Post
4. As partisans bicker in the US, Venezuelans continue to suffer | TheHill  The Hill
5. Rebuilding Venezuela after Maduro will require the US to front some money | TheHill  The Hill
6. View full coverage on Google News

https://www.theguardian.com/world/2019/may/09/venezuela-maduro-guaido-crackdown-edgar-zambrano

2019-05-09 13:45:00Z
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BBC radio host fired over racist royal baby tweet - CNN

On Wednesday, the BBC Radio 5 Live presenter tweeted a black and white photo of a man and woman holding hands with a chimpanzee in a suit and a top hat, with the caption, "Royal baby leaves hospital."

Amid widespread accusations of racism, Baker deleted the tweet and said he was sorry the "gag" had "whipped some up." He claimed the connotations had not occurred to him because his "mind (is) not diseased."

In a second message, Baker said that the tweet was "supposed to be a joke about Royals vs circus animals in posh clothes but interpreted as about monkeys & race, so rightly deleted. Royal watching not my forte." On Thursday, the broadcaster said he made an "enormous mistake."

A BBC spokesperson said: "This was a serious error of judgment and goes against the values we as a station aim to embody. Danny's a brilliant broadcaster but will no longer be presenting a weekly show with us."

Baker responded defiantly to the decision, saying on Twitter that the calls for his dismissal were a "masterclass in pompous faux-gravity" and that the BBC "literally threw me under the bus."

Prince Harry and Meghan's newborn son, Archie Harrison Mountbatten-Windsor, was born early on Monday morning. On Wednesday, the Duke and Duchess of Sussex presented the baby, their first, to the world in front of selected media.

In a significant milestone for British society, the newborn has made history by becoming the first biracial child in the royal family.

Since the announcement of her pregnancy, Meghan has been a target of racist abuse across social media.

In March, Kensington Palace staff announced they would devote more resources to deleting comments targeting the Duchess of Sussex, and to blocking abusive Twitter and Instagram accounts. The royal household also issued a set of guidelines for people engaging with its social media channels.

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https://www.cnn.com/2019/05/09/uk/danny-baker-tweet-royal-baby-gbr-scli-intl/index.html

2019-05-09 14:20:00Z
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