James Politi in Washington and Colby Smith in New Yorks
Stocks and Treasury yields fall after latest escalation in trade war with Beijing
Donald Trump said the US would place a 10 per cent tariff on $300bn of additional Chinese goods, in a new escalation of the trade war between the world’s two largest economies.
In a series of tweets, Mr Trump lamented the outcome of a round of negotiations between top US and Chinese officials this week in Shanghai, saying China was not following through on its pledges to buy more American farm products and restrict the flow of fentanyl to the US.
“The US will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%,” Mr Trump said.
“We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!,” he added.
The announcement of fresh tariffs pushed the yield on the benchmark 10-year Treasury note to 1.89 per cent, its lowest level since 2016. Shorter-dated Treasury bills spiked, with the yield plummeting to 1.75 per cent. Bond yields move inversely to price. The dollar lifted from its lows for the day, rising 0.03 per cent against its peers.
The S&P 500 sank as much as 1.1 per cent on the announcement, before paring back some of its losses.
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