Stocks and currency fall after US-China trade talk stalled (Economy news)

Source: AFP/CNBC

Stocks closed on a bearish note on Friday after CNBC reported the trade talk between the US and China had been stalled. The report sent the US stock exchange market into a frenzy as traders sees red everywhere.Wall Street saw the fourth straight weekly drop for the Dow Jones Industrial Average as they went down 98.68 points to 25,764 while the Nasdaq Composite was down 1% to 7,816.28. Dow erased their 30 points gain earlier in the day, while Nasdaq and the S&P 500 were knocked down further. Big US corporations such as Apple also saw their shares fell 0.6%, bringing their weekly share to 4.1%.

The Americans aren't the only one seeing red as the Chinese currency Yuan had also suffered the same fate. The Yuan had been fairly stable in 2019 while the trade talk had been ongoing. But since President Donald Trump tweeted about a new tariff earlier this month and the next round of trade talk had not been scheduled, the Yuan had dropped 2.7% against the US Dollar. Chinese stocks had felled sharply overnight, the Shanghai Composite dropped 2.5% and posted its longest weekly losing streak since July 2018.

The trade talk have been put on hold by both parties and have yet to have a date for the next trade talk. China has not shown willingness to deliver past commitments it made on earlier this month; while the Trump administration had put Chinese telecommunications company Huawei and its affiliates on a business blacklist and banned it from the supply chain. Last week, the U.S. increased tariffs on $200 billion in Chinese goods. China retaliated by raising duties on $60 billion in American products.

It is important for both nations to compromise and resume and reach a conclusion through the trade talk. The Yuan has been a meter for progress in US-Chinese trade talks, and for months it seemed to be on a steady path. However, it is now sliding toward a psychological level that if reached, could send turbulence through global financial markets. The US's economy and diplomacy ties with the world is also a concern. The aggression and increase scrutiny from the Trump's administration had not sent a positive impression to the world's political and business leaders.

References

https://www.cnbc.com/2019/05/17/us-china-trade-talks-have-stalled-sources.html