Market casualties grow as China-US trade hostilities unleash havoc on markets

China’s planned retaliation to the string of tariffs imposed by the US hit global markets on Wednesday, knocking everything from German stocks to soyabeans, as the spectre of a trade war intensified. U.S. automakers, aero companies, grain merchants and chipmakers were the early casualties. Shares in Boeing, the biggest US exporter by value, dropped 4.6% in pre-market trading in New York.

The speed with which the trade spat between Washington and Beijing is ratcheting up – the Chinese government took less than 11 hours to respond with its own measures – led to a sharp sell-off in global stock markets and commodities. China levied 25% additional tariffs on U.S. goods earlier in the day. But unlike Washington’s list that covers many obscure industrial items, Beijing’s covers 106 key U.S. imports including soybeans, planes, cars, and chemicals.

China is Boeing’s biggest export market and the 737 is its biggest selling product. The company said in a statement in November 2017 that it planned to deliver nearly 100 737 MAXs to Chinese airlines before the end of this year. Now, the difficulties arise.

Among the casualties: Automakers Ford (N:F), General Motors (N:GM), Fiat Chrysler (N:FCAU) and Tesla (O:TSLA) fell between 2.3% and 4.4%. Grain merchant Archer Daniels (N:ADM) was down 3.3%, while Bunge (N:BG) slipped 2.2%.

The oil price was also swept up in the wider fears about what deepening trade tension mean for global growth. Brent crude, the international benchmark, fell 1.2 per cent to $67.32 a barrel while US marker West Texas Intermediate declined 1.5 per cent to $62.39 a barrel

Sources: 

https://www.ft.com/content/e8959f94-37e0-11e8-8b98-2f31af407cc8

https://www.ft.com/content/73ddbe62-37e4-11e8-8b98-2f31af407cc8

https://www.investing.com/news/stock-market-news/boeing-ford-lead-list-of-casualties-in-chinaus-trade-spat-1377132