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Asian stock markets collapsed and the yuan reached its lowest level in 11 years on Monday after US President Donald Trump stepped up his trade war with China by raising tariffs on imports from one country to another. more than $ 500 billion.
Friday's decision surprised investors, who ran to the hills, pounding European and Wall Street stocks, while safe havens such as the yen and gold – key assets in times of turmoil and uncertainty – have made a leap.
The decision, which also provoked an attack by the US president against China and a call for US companies to leave the country, eclipsed the largely dovish speech of Federal Reserve Chairman Jerome Powell, but which was below from Trump's demand for high interest rates cuts.
Friday's tariff increase followed Beijing's decision to increase levies on $ 75 billion worth of US goods.
US tariffs on Chinese goods worth $ 250 billion will increase by 30% and those on the $ 300 billion of Chinese products will increase to 15% from October 1st.
White House spokeswoman Stephanie Grisham added that the president regretted not increasing the levies.
On Monday, the Chinese currency, the yuan, fell briefly to $ 7.1487 – its lowest level since early 2008 at the height of the global financial crisis. Trump, who described Beijing as manipulator of the currency, might be wrong.
"The gloves are coming off both sides and, as a result, the depreciation of the yuan is a clear buffer against US tariffs," Mitul Kotecha, a senior economist for emerging markets at Toronto-Dominion Bank, told Bloomberg. .
"As long as China can ensure that the weakness of the yuan is well controlled, that is to say that it does not cause large capital outflows, you can expect a new depreciation of the currency. "
Hong Kong recorded a 2.9% loss on the stock markets. Investors were also frightened by new violent protests in the city, which saw police using a water gun for the first time.
Shanghai lost 1.2% and Tokyo lost 2.2%. Investors were not moved to learn that Trump and Japanese Prime Minister Shinzo Abe had reached an agreement in principle on a major trade deal.
Sydney, Seoul, Wellington, Jakarta and Taipei all sank by more than 1%, while Bangkok lost more than 2%. However, Mumbai has grown more than 1% thanks to measures taken by the authorities to stimulate the economy.
At the beginning of the exchanges, Paris fell by 0.4% and Frankfurt by 0.3%.
– The boss of the Fed in sight –
There were some signs of hope later in the day after Trump had declared at the G7 summit in Biarritz, France, that a new round of negotiations between US and Chinese negotiators "would begin very soon. ".
Earlier, China's leader in the talks had sought to reduce tensions by saying "we are willing to solve the problem through consultation and cooperation with a calm attitude".
On the road to safer destinations, gold reached its highest level in six years, at around $ 1,550 an ounce, while the Japanese yen was at its highest level since the end of 2016 .
Fears over the impact of the trade war on demand also affected oil prices, with the two main contracts extending Friday's sales.
The news on tariffs eclipsed Powell's much anticipated speech Friday, in which he pledged to ensure US growth and suggested further stimulus if inflation was reduced.
He acknowledged that the bank did not have a "settlement" to deal with the US-China trade war, but did not announce further rate cuts, provoking Trump's indignation, which blame the Fed boss for curbing the economy.
"As usual, the Fed did not do anything!" Trump said.
"My only question is who is our biggest enemy, Jay Powel or President Xi?" Trump said, misspelled the name of the head of the Fed and referring to the Chinese leader Xi Jinping.
"Referencing the Fed president as an enemy is, frankly, quite up to the price … but referring to President Xi now as an enemy rather than as" my friend "is much more serious," Ray said. Attrill of the National Australia Bank.
"Indeed, the fallout is already evident in an editorial of Saturday's People's Daily, saying China would follow through on reprisal measures announced Friday and would fight until the end of the trade war against the US." Failure of the United States to keep its promises ".
– Key figures around 07:20 GMT –
Tokyo – Nikkei 225: down 2.2% to 20,261.04 (closing)
Hong Kong – Hang Seng: down 2.9% to 25,428.57.
Shanghai – Composite: 1.2% decline to 2,863.57 (closing)
London – FTSE 100: closed for a holiday
Dollar / yuan: to 7,1475 yuan against 7,0956 yuan to 21:00 GMT Friday
Pound / Dollar: DOWN to $ 1.2268 from $ 1.2290
Euro / dollar: UP up to $ 1.1148 from $ 1.1145
Euro / pound: UP at 90.82 pence of 90.68 pence
Dollar / Yen: Decrease to 105.21 Yen from 105.39 Yen
West Texas Intermediate: 57 cents lower at $ 53.60 per barrel
Brent from the North Sea: 47 cents to 58.85 dollars a barrel
New York – Dow: down 2.4% to 25,628.90 (closing)
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