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According to Axios, President Donald Trump believes that the best trade negotiation tactic is to threaten to raise tariffs on vehicles manufactured abroad. According to the report, Trump told his associates that he was in a position to reach a better trade deal with Canada because he had threatened Canadian Prime Minister Justin Trudeau to levy royalties on cars made in Canada.
Trump plans to charge a 25% fee on cars manufactured outside the US since the beginning of the year. Car manufacturers and foreign governments have criticized this for Trump, pointing out that such a lift would increase car costs and hurt sales and jobs.
The Axios report comes as Mr. Trump and Chinese President Xi Jinping prepare to meet at the G-20 summit later this month.
J.P. Morgan's Haibin Zhu said in a note that there was a 55% chance that the two leaders could not reach an agreement at the summit.
"We remain cautious because the challenge of resolving the US-China conflict remains high," said Zhu. "The conflict between the United States and China extends beyond trade and covers areas such as technology, intellectual property rights, market access, the politics of the world, and the politics of China. industry, and ultimately focuses on competition between the two economic superpowers. "
"It is not clear whether China is willing to make visible changes beyond trade (market access, intellectual property protection, technology, etc.) and whether the United States will give priority to its list of requests, "added Zhu.
Apple's decline and concerns about trade have overshadowed big business.
SAP has agreed to buy $ 8 billion from Qualtrics, a private company that competes with SurveyMonkey. Meanwhile, Veritas Capital and Elliott Management have agreed to buy Athenahealth for more than $ 5 billion.
Elsewhere, tobacco stocks have fallen sharply after the Wall Street Journal announced that the Food and Drug Administration was planning to ban menthol cigarettes in the United States. British American Tobacco shares fell by nearly 7%, while Philip Morris and Altria Group fell by 1.3% and 2.5%. , respectively.
General Electric shares fell 7.3% and trade less than $ 8 after CEO Larry Culp told David Faber of CNBC that he thought he was " urgent "to reduce some of the company's leverage.
-CNBC & # 39; s
Spriha Srivastava
contributed to this report.
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