On Friday, China announced that it would impose tariffs on American products starting from September. The trade war between China and the U.S. began in 2018. The latest escalation in this trade dispute highlighted that neither the U.S. nor China was trying to end this dispute. Countries sought to restart the negotiations process especially after the G-20 summit, but without success.
Problems created by the trade war had a negative impact on the global economy. This trade conflict created an additional problem for both of the countries.
Chinese tariffs and Stock market
On August 23, U.S. stock indexes reacted to the news that China imposed new tariffs against the American products. Chinese officials announced on August 24 that from September they would impose tariffs ranging from 5% to 10%. According to this announcement, China will impose tariffs on $75 billion U.S. goods including automobiles. Moreover, in the case of cars tariffs will be even higher as tariffs will reach 25% and also China is going to impose 5% tariff on auto parts.
Based on their plan, they will divide these tariffs into two parts. The first part of tariffs will be imposed from September. The second part of the tariffs will target the U.S. products starting from December.
The response of U.S. stocks once more highlighted the importance of the trade war for the stock market. For instance, Dow Jones Industrial Average futures fell by 150 points. Initially, the Dow Jones index fell by 165 points this happened when the stock market opened on August 24.
Another U.S. stock index, S&P 500, also experienced problems on Friday. Its index decreased by 0.3% whereas Nasdaq 100 futures reduced by 0.4%.
Another news connected to the stock market was the annual Federal Reserve symposium in Jackson Hole. The last day of the symposium was on August 24. The chairperson of the Federal Reserve addressed the attendees on Friday.
On August 24 the U.S. stock market struggled to contain the problems caused by the trade war.