US Kindled A Massive Trade War
The US began imposing aluminum tariffs on Canada, Mexico and the European Union, suggesting that the trade war is near at hand. The imposed countries are outraged, claiming they will immediately use retaliation measures.
Jean-Claude Juncker (European Commission President) commented US action, saying they were “unjustified” and “at odds with WTO rules”. He promised to ” defend the Union’s interests, in full compliance with international trade law.” Cecilia Malmstrom (Trade Commissioner) added: “now we have clarity, the EU’s response will be proportionate and in accordance with WTO rules. EU will trigger a dispute settlement at the WTO and impose rebalance measures.” The EU has already issued the list of US products for retaliation.
Justin Trudeau (Canadian Prime Minister) stated Donald Trump’s decision was “totally unacceptable” and announced retaliatory tariffs on CAD 16.6 billion in US imports. There are 2 list of products. The first one will be subject to a 25% tariff and the second one will be subject to a 10% tariff. Mexican leaders also expressed their utter frustration and condemnation.
DOW fell-251.94 points (-1.02%). S&P 500 dropped -18.74 points (-0.69%). NASDAQ reduced -20.33 points (-0.27%). Nikkei lifted 0.06%. HK HSI was down -0.15%. The Pound is trading as the softest. Then goes Aussie. Kiwi is the firmest, followed by the Japanese Yen. The greenback is recovering.
In Italy, a coalition government has been formed with Giuseppe Conte as Prime Minister, Giovanni Tria as economy minister and Paolo Savona as EU affairs minister. 5-Star and League leaders Luigi Di Maio and Matteo Salvini will be vice premiers. The new Cabinet is yet to face a confidence vote in both houses. Overall, the whole political situation has eased.
Chinese Caixin manufacturing PMI remained at 51.1 in May. Japanese PMI manufacturing closed at 52.8, revised up from 52.5. Capital spending increased 3.4% in the first quarter. New Zealand terms of trade fell -1.90% qoq. Australian PMI manufacturing fell from 58.3 to 57.4 in May. Today, British PMI manufacturing and US non-farm payroll are the most anticipated events. Additionally, Eurozone will issue PMI manufacturing revision, Swiss will announce PMI manufacturing, US will publish ISM manufacturing and construction spending, Canada will present PMI manufacturing.