Asian markets plunge as Trump threatens to hike China tariffs
Hong Kong: President Donald Trump sent Asian markets plunging Monday after threatening to hike tariffs on USD 200 billion of Chinese goods at the end of the week in a bid to speed up stuttering trade talks between the economic superpowers.
Shanghai and Hong Kong equities led big losses across the region, with the Chinese yuan also taking a battering after the president threw a spanner into the high-level negotiations, which many observers were expecting to wrap up imminently.
"For 10 months, China has been paying Tariffs to the USA of 25 per cent on 50 Billion Dollars of High Tech, and 10 per cent on 200 Billion Dollars of other goods," Trump tweeted Sunday night. "The 10 per cent will go up to 25 per cent on Friday."
The warning will throw a shadow over the next round of talks, with a delegation from Beijing due in Washington this week, with Bloomberg News reporting the Chinese side are considering their position. The two sides have imposed tariffs on USD 360 billion in two-way trade since last year.
But Trump and his Chinese counterpart Xi Jinping agreed a truce in December, helping fan a surge across world stock markets for the past four months.
"Trump has taken the proverbial sledgehammer to the walnut this morning and the only two words likely to be on the minds of traders and investors this week are 'trade talks'," said OANDA senior market analyst Jeffrey Halley.
In early trade Hong Kong tumbled 2.5 per cent and Shanghai was off more than three percent, with Singapore off 2.8 per cent, Taipei 1.5 per cent off, while Sydney and Wellington were each one per cent down.
Manila and Jakarta were also sharply lower. Tokyo and Seoul were closed for holidays.
"It's making the outcomes more binary, with everybody focused on the Friday deadline," said Joyce Chang, chair of global research at JPMorgan Chase & Co.
"There doesn't seem to be much leeway now to much go past that. It's going to mean that investors will be very focused on the trade issues even beyond China," she told Bloomberg TV.
The yuan also took a hiding, shedding more than 1.3 per cent at one point against the dollar, its heaviest fall in more than three years. The currency had been sitting around 10-month highs on the back of optimism the two sides would sign off on a trade pact.
"Investors will remain bearish on the yuan, as they reprice in trade war risks because the new developments are a reversal of previous positive progress," Ken Cheung, senior foreign-exchange strategist at Mizuho Bank.
"The news was unexpected." However, while trading floors are awash with red, Stephen Innes at SPI Asset Management remained positive.
"We do know the president tends to retreat from more aggressive displays, so I am viewing this thinly veiled threat as political posturing or a tactical decision to apply more pressure on China to put through a trade deal that aligns with the best USA economic interest at heart.
"Despite US-China trade talks hitting an apparent impasse based on (the) tweet, I think a deal will be signed shortly."
Trump's outburst overshadowed another blockbuster US jobs report Friday that reinforced the view that the economy is in rude health, while measured wage inflation eased pressure on the Federal Reserve to hike interest rates.
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars....
— Donald J. Trump (@realDonaldTrump) May 5, 2019 ">
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars....
— Donald J. Trump (@realDonaldTrump) May 5, 2019
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Several Gurugram schools receive hoax bomb threats
Gurugram (PTI): Several Gurugram schools received another hoax bomb threat emails on Wednesday morning, prompting police to launch searches on the premises.
Police said the email was sent by the 'Khalistan National Army', with threats issued to Haryana Chief Minister Nayab Singh Saini to declare April 29 as the "40th Khalistan Declaration Day". It also threatened to bomb the Red Fort in Delhi.
Police said it was a hoax as no suspicious items were found after an intensive search.
Several schools, including Shri Ram, Amity, and the HDFC school, received threatening emails at 8.33 am, when classes had already begun, police said.
The school administrations became aware of the threats around 9 am and immediately informed the police, a senior police officer said.
The schools immediately implemented emergency protocols, with many declaring a holiday and asking parents to take their children home safely, the officer said.
A large number of anxious parents gathered outside the schools, as police and bomb squad teams reached the spots and started checks.
"Around 10 schools have approached the police from morning until now over bomb threats. Police teams are alert, and searches are underway on all the premises", the officer said.
As soon as the information about this email was received, police in Gurugram and Delhi swung into action and started investigation.
Schools immediately implemented emergency protocols upon receiving the mail. Many schools declared a holiday and sent messages to parents, asking them to take their children home. Large crowds of parents gathered outside the schools.
The schools were sanitised by sending a bomb disposal squad as well as a dog squad.
A senior police officer said that police teams thoroughly searched the school premises, classrooms, buildings, and surrounding areas. No suspicious objects or explosive materials were found during the investigation.
"Police teams are seriously investigating the entire matter. Cyber experts are being consulted to determine the authenticity of the email, its source, and the identity of the sender", added the officer.
This is the third time since January that schools have received fake bomb threats.
In March, at least a dozen schools in the city received bomb threat emails, which later turned out to be hoaxes.
Similarly, on January 28, as many as 13 schools received hoax bomb threats via email, forcing authorities to evacuate campuses and suspend classes.
Last month, police arrested a Bangladeshi national whose email ID was allegedly used to make a bomb threat for some payment.
