And so, President Donald Trump has left for Buenos Aires to attend the annual G20 Summit, which could make or break the country’s existing trade relations with China. Chinese companies listed in the US, especially, are keeping their fingers crossed as they have been on the receiving end of the trade crisis, with their stocks getting battered despite strong operational performance.
Things aren’t looking quite rosy at the moment as Trump, only a few days back, stated that he was planning to raise the tariffs, from the current level of $200 billion of Chinese imports. If the talks with Chinese President Xi Jinping are unsuccessful at the G20 summit, Trump said, tariffs would be extended to $267 billion of Chinese imports.
Such a case would send multinational firms scrambling to move production out of China, besides inviting revenge measures from the Asian country. China has already slapped tariffs on $113 billion worth of US imports out of total US imports of about $130 billion in 2017.
However, financial watchers expect little progress in the political logjam. Trump recently revealed to the Wall Street Journal that he doesn’t wish to strike a deal as he likes the current status of affairs.
Market on alert after Trump’s tariff threat adds to Apple rout
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Two earlier international meets – the G7 Summit in Canada and the Asia-Pacific Economic Cooperation (APEC) Summit – had also failed to come up with a proper joint statement.
While even US companies with global exposure are reeling under the uncertainties caused by the trade war, Chinese stocks have been hit worst. In the past 52 weeks, Alibaba (BABA) is down 12%; Baidu (BIDU) is down 23%; Weibo (WB) is down 45%; and JD.com (JD) is down 43%.
Trump effect and trade war: Tariffs imposed by the United States on the world in 2018
Chinese conglomerate Tencent’s music streaming arm has stated that it would decide on its US IPO date based on the outcome of the G20 Summit.