Oil prices, Treasuries hit after China slaps 84% tariffs on US
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More news: Investors continued their flee from Treasuries on Wednesday after China announced 84% tariffs on US goods. Stocks, oil and the US dollar also declined on the news.
The numbers: US equity futures were down 2%, while European stocks plummeted 4%. Yields on 10-year Treasuries pushed up to 4.51% before easing to 4.38%, up 0.12 percentage points on the day, adding to broader concerns that the instruments may have lost their sheen as safe havens.
Contracts on the S&P 500 index slipped 1.4% and those on the Nasdaq 100 were down 1.2% ahead of the US market open.
US crude oil futures briefly dipped almost 7% to US$55 ($91.43) per barrel in pre-market trading, on fears that a trade-war prompted recession could impact oil demand.
In Europe, the Stoxx Europe 600 dropped 4%, with the FTSE 100 falling 3.4% and Germany’s Dax down 3.5% on the news.
China retaliates with 84% tariffs on US imports
The news: China has responded to the US government's trade tariffs on imported goods, increasing tariffs on US goods into the country to 84%.
The numbers: US President Donald Trump on Monday increased US tariffs on goods imported from China by 50%, increasing the country's total tariffs to 104%.
On Wednesday, China retaliated to the increases, announcing that it will impose 84% tariffs on US goods, up from the 34% previously announced.
The context: The Chinese Finance Ministry said it will impose the tariffs from Thursday 10 April, and has added 12 US entities to its export control list and 6 US entities to its 'unreliable entity' list.
The 50% retaliatory tariff marks another escalation in the trade war between the US and China, the worlds two largest economies, and follows comments made by China one day earlier that it would “fight to the end” on the US tariffs. China was already facing blanket tariffs on auto, steel and aluminium that the Trump administration imposed prior to its ‘Liberation Day’ announcements last week.
China told the World Trade Organisation (WTO) on Wednesday that the US’ imposition of reciprocal tariffs on Beijing threaten to further destabilise global trade.
"The situation has dangerously escalated...As one of the affected members, China expresses grave concern and firm opposition to this reckless move," China said in a statement to the WTO seen by Reuters. China said the tariffs violate WTO rules and undermine a multilateral trading system.
The sources: Reuters, Bloomberg, China Ministry of Finance
