US stocks fall amid lingering trade war unease

Trader Tommy Kalikas works on the floor of the New York Stock Exchange, in this file photo from Wednesday. (AP Photo/Richard Drew)
Updated 23 July 2018
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US stocks fall amid lingering trade war unease

  • About 40 minutes into trading, the Dow Jones Industrial Average was down 0.1 percent at 25,031.47
  • European Commission President Jean-Claude Juncker heads to Washington on Wednesday to meet with President Donald Trump

NEW YORK: Wall Street stocks retreated early Monday ahead of major earnings reports later this week amid lingering unease over US trade conflicts.
About 40 minutes into trading, the Dow Jones Industrial Average was down 0.1 percent at 25,031.47.
The broad-based S&P 500 dipped 0.1 percent to 2,799.59, while the tech-rich Nasdaq Composite Index slid 0.2 percent to 7,801.58.
European Commission President Jean-Claude Juncker heads to Washington on Wednesday to meet with President Donald Trump and try to avert an escalation of tit-for-tat trade tariffs.
Trump already is embroiled in a messy trade spat with China, while negotiations with Canada and Mexico to revamp the North American Free Trade Agreement have stalled.
“It is hard to imagine a more difficult trading environment due to worsening trade-war rhetoric, a sharp devaluation of the Chinese currency, an unsynchronized global recovery, and the President commenting on Fed policy,” said Canaccord Genuity strategist Tony Dwyer.
Dwyer noted that any pullback would be a buying opportunity given strong corporate earnings.
Earnings season will heat up further in the coming days with reports from Google-parent Alphabet, Boeing and Amazon, among others.
Also on tap this week will be the first reading on second-quarter US growth, which is forecast to be a blockbuster, albeit a one-time burst.
Among individual stocks, US-listed shares of Fiat Chrysler fell 2.3 percent, while Ferrari slumped 4.8 percent after the sudden exit of chief executive Sergio Marchionne due to health reasons.
Amazon dipped 0.7 percent after Trump again attacked the company on Twitter, swiping at the “Amazon Washington Post” and suggesting the company should face antitrust charges.
The Washington Post is owned by Amazon chief executive Jeff Bezos, but is now owned by the online retail giant.


Germany: US calling European cars a threat is ‘frightening’

Updated 16 February 2019
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Germany: US calling European cars a threat is ‘frightening’

  • ‘If these cars ... suddenly spell a threat to US national security, then that is frightening to us’

MUNICH, Germany: German Chancellor Angela Merkel on Saturday labelled as “frightening” tough US trade rhetoric planning to declare European car imports a national security threat.

“If these cars... suddenly spell a threat to US national security, then that is frightening to us,” she said.

Merkel pointed out that the biggest car plant of German luxury brand BMW was not in Bavaria but in South Carolina, from where it exports vehicles to China.

“All I can say is it would be good if we could resume proper talks with one another,” she said at the Munich Security Conference.

“Then we will find a solution.”

A US Commerce Department report has concluded that auto imports threaten national security, setting the stage for possible tariffs by the White House, two people familiar with the matter said Thursday.

The investigation, ordered by President Donald Trump in May, is “positive” with respect to the central question of whether the imports “impair” US national security, said a European auto industry source.

“It’s going to say that auto imports are a threat to national security,” said an official with another auto company.

The report, which is expected to be delivered to the White House by a Sunday deadline, has been seen as a major risk for foreign automakers.

Trump has threatened to slap 25 percent duties on European autos, especially targeting Germany, which he says has harmed the American car industry.

After receiving the report, the US president will have 90 days to decide whether to move ahead with tariffs.

Trump in July reached a trade truce with European Commission President Jean-Claude Juncker, with the two pledging no new tariffs while the negotiations continued.

Brussels has already drawn up a list of €20 billion ($22.6 billion) in US exports for retaliatory tariffs should Washington press ahead, the commission’s Director-General for Trade Jean-Luc Demarty told the European Parliament last month.

The White House has used the national security argument — saying that undermining the American manufacturing base impairs military readiness, among other claims — to impose steep tariffs on steel and aluminum imports, drawing instant retaliation from the EU, Canada, Mexico and China.

Trading partners have sometimes reacted with outrage at the suggestion their exports posed a threat to US national security.