Trump Tariff Anxiety Weighs on Market as December 15 Deadline Looms

bssunilreddy

Chosen of the Omnissiah
Trump Tariff Anxiety Weighs on Market as December 15 Deadline Looms

As the Trump tariff deadline on December 15th looms, the Tech Sector, which is highly dependent on imports from China, is likely to remain spooked, as investors are unsure of the likely outcome. Last week saw the broader market gaining ground as talks about the completion of a trade deal and an easing of trade tension between the U.S. and China buoyed investor sentiment. Reports of strong job numbers coming out from the Bureau of Labor Statistics (BLS) likewise pushed off fears that the U.S. is at the precipice of another recession because hiring was unexpectedly higher for the month of November. Expected later this week, will be the final decision on tariffs as well as data from the BLS on the November Consumer Price Index (CPI).

However, the looming threat of additional tariffs will likely pause further gains in the market as investors await the final verdict from the Trump administration expected sometime this week. The new tariffs would levy a 15% tax on an additional $160 billion worth of Chinese goods, including typical consumer electronics like laptops, smartphones, and electronics. These tariffs were previously delayed by the administration so that the new tax would not impact consumers during the busy holiday shopping season, which depending on how the additional costs were absorbed, could impact the Chinese manufacturers that might drop prices, the U.S. companies which would take on some of the cost for the new tax and thus see reduced earnings, or the consumer who would pay the cost by paying higher prices.

In addition to the above, China was also accused of devaluing its currency to reduce the impact of the tariffs. So far, it looks like a combination of the above is occurring. Chinese exports saw a -1.7% producer price reduction and a -4.7% Export price index reduction. In addition, the companies purchasing the goods for import are paying the tariffs while only passing a portion on to the consumer. For example, the CPI went up .4% for the month of October, which was higher than expected, with the November numbers expected to be released December 11. This does show that consumer prices are increasing. For the month of October, the U.S. government collected a record amount in tariffs with $7.2 billion in taxes collected, $1 billion more than the year prior.

Since most companies engaged in importing goods use a combination of the previously listed and the impact so far has been relatively minor as far as price increases. There probably isn’t too much to worry about from a consumer perspective. Based on the prices listed during the month of November, seeing unexpectedly lower prices based on the Adobe Analytics prices for the holiday shopping season, the CPI will probably turn out to be lower or in line with expectations. Until these tariff issues are resolved and additional data for the CPI is released later this week, uncertainty will overhang the market this week.

Source:Trump Tariff Anxiety Weighs on Market as December 15 Deadline Looms
 
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Its a matter of ego now. Trump won't back down because it was something in his poll agenda & Xi won't back down as he didn't start it. With elections in US next year & recession predicted, who knows what will happen.
 
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bssunilreddy

bssunilreddy

Chosen of the Omnissiah
Its a matter of ego now. Trump won't back down because it was something in his poll agenda & Xi won't back down as he didn't start it. With elections in US next year & recession predicted, who knows what will happen.
Here Are The Countries On The Brink Of Recession Going Into 2020
 
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bssunilreddy

bssunilreddy

Chosen of the Omnissiah
But Warren said that this thing cannot be predicted. Are you sure India will go into recession?
This is based upon several simulations taking into account several trading houses & economies which has adverse impact if at all they fall.

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bssunilreddy

bssunilreddy

Chosen of the Omnissiah
Climate change is a major factor because all electronics should be compliant with emission norms all countries agreed upon.
What about the products already reached the stores
Everybody wants the latest product which meets those norms
Then comes economic slowdown
But RBI might initiate corrective measures
Let us see what happens

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