6 Most Important Things in Business Today
The Trump administration may increase tariffs on Chinese goods again. According to MarketWatch:
President Donald Trump threatened to sharply escalate a trade conflict with China, asking his administration to identify $200 billion in imported goods from China to be penalized with tariffs.
Trump’s move comes after Beijing announced it would retaliate in kind to planned U.S. tariffs on $50 billion in imports from China. The U.S. president’s latest plans, if carried out, would likely plunge the world’s two biggest economies into a trade war.
China said it would react to the Trump move with more trade actions of its own. According to Xinhua:
A spokesperson of China’s Ministry of Commerce (MOC) said Tuesday that if the United States loses its rationality and unveils another list of Chinese products for additional tariffs, China will have no choice but to take comprehensive measures combining quantitative and qualitative ones to resolutely strike back.
After unveiling plans to impose additional tariffs on Chinese goods worth around 50 billion U.S. dollars, the United States went even further by threatening to identify 200 billion U.S. dollars worth of Chinese products for additional tariffs.
“Such practice of imposing extreme pressure and blackmailing is contrary to the consensus the two sides have reached through rounds of consultations, and disappoints the international community,” the spokesperson said.
The Senate has blocked the Trump administration’s plan to allow exports that would save China telecom company ZTE. According to The Wall Street Journal:
The Senate voted to reinstate a ban on selling U.S. parts to Chinese telecommunications company ZTE Corp., rejecting a deal President Donald Trump made with Beijing to save the firm.
The measure was wrapped in a larger, must-pass defense bill that cleared the Senate on an 85-10 vote Monday. Mr. Trump is expected to turn his attention to persuading congressional negotiators to strip out the ZTE sales ban as they reconcile competing House and Senate versions of the bill.
Chinese markets dropped sharply on fears of a trade war. According to CNBC:
Trump said on Monday that he had asked the U.S. Trade Representative to identify $200 billion worth of Chinese products that will be subject to additional tariffs of 10 percent. Those tariffs will take effect if China did not “change its practices,” Trump added in a statement.
In turn, China said it would take countermeasures if the U.S. went ahead with the additional tariffs it had threatened.
Greater China markets recorded heavy losses on the back of that news. On the mainland, the Shanghai composite fell 3.82 percent to close below the 3,000 mark at 2,906.43. The smaller Shenzhen composite sank 5.77 percent and closed at 1,594.05.
Elon Musk said a fire at a Tesla Inc. (NASDAQ: TSLA) plant may have been caused by an employee. According to CNBC:
Tesla CEO Elon Musk sent an email to all employees on Monday morning about a factory fire, and seemed to reference possible sabotage.
Now, CNBC has learned that Musk also sent an e-mail to all employees at Tesla late on Sunday night alleging that he has discovered a saboteur in the company’s ranks.
Musk said this person had conducted “quite extensive and damaging sabotage” to the company’s operations, including by changing code to an internal product and exporting data to outsiders.
Russia made a sharp reduction in its holdings of U.S. Treasuries, a new government report showed. According to CNBC:
One of the most glaring declines has come from Russia, which sliced its holdings of U.S. debt nearly in half from March to April, from $96.1 billion to $48.7 billion. Russia’s Treasury ownership peaked at $108.7 billion in May 2017.