Markets Still Spooked By Trade Fears; Tech Sector Leads Stocks Lower

Markets Still Spooked By Trade Fears; Tech Sector Leads Stocks Lower

Under the plan, the White House would use one of the most expansive legal tools available to declare China's investment in USA companies involved in technologies such as new-energy vehicles, robotics and aerospace a threat to economic and national security, according to eight people familiar with the plans.

In March, Trump directed Treasury Secretary Steven Mnuchin to devise a system that would limit Chinese investment "in industries or technologies deemed important to the United States".

Still, the Global Times was quick to list major irritants in the U.S.

Alphabet Inc (NASDAQ: GOOGL) 2.6 percent.

It also said it would unveil a revised list of Chinese goods for tariffs, which it did on June 15.

Late last month, Trump infuriated U.S. allies - from the European Union to Canada and Mexico - by imposing tariffs of 25 percent on imported steel and 10 percent on aluminum.

Shortly after these tariffs were introduced, China began investigating potential tariffs on USA exports of sorghum (a type of cereal crop) worth around US$1bn. At one point Monday, the Dow fell nearly 500 points.

"All we're doing here with the president's trade policy is trying to defend our technology when it may be threatened".

Chinese investment has provided jobs and tax income for the U.S., and it should view commercial activities "objectively", Foreign Ministry spokesman Geng Shuang told reporters in Beijing on Monday.

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"President Donald Trump, already embroiled in a trade battle with China, plans to ratchet commercial tensions higher by barring many Chinese companies from investing in US technology firms, and by blocking additional technology exports to Beijing, said people familiar with administration plans".

He said markets have misunderstood the president's plans. "The market is starting to price in that the tariffs will start to become real". "Nobody wins" a trade war, IMF Managing Director Christine Lagarde said in a statement earlier this month. "It's bad for growth", he said.

Last month, Mnuchin said a trade war with China was "on hold" after officials of the world's two largest economies held talks in Beijing that were focused on opening more sectors of China's economy and increasing purchases of American goods.

Ahead of Mattis' arrival, Chinese state media said a formation of Chinese warships has been holding daily combat drills for more than a week in waters near Taiwan, and there have been frequent Chinese air force exercises near the island.

The public got a sense of those specifics late Sunday, when the Wall Street Journal reported how the new restrictions might work.

A Reuters report says China accused the Trump Administration of being capricious in its handling of trade issues.

The Treasury Department, which is drawing up the rules, and the White House did not return requests for comment outside of regular office hours.

U.S. Defense Secretary Jim Mattis arrived in Beijing on Tuesday for meetings with senior Chinese leaders, as the world waits for indications that North Korea is taking steps to dismantle its nuclear program following the summit between President Donald Trump and North Korean leader Kim Jong Un.

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