China Vows Retaliation If Trump Escalates Tariff Battle

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China Vows Retaliation If Trump Escalates Tariff Battle

Chinese shares weakened, with the blue-chip index off 0.6 percent while Shanghai's SSE Composite stumbled 0.4 percent.

Japan's Nikkei, which had opened lower, ended 0.3 percent higher after revised second-quarter gross domestic product data showed the world's third-biggest economy grew at its fastest pace since 2016.

With Ford joining Apple in criticizing President Trump's tariffs, the pressure on the administration to back down and de-escalate the trade war is perhaps greater than ever. The United States imported $3 of Chinese goods past year for every $1 of American goods bought by China.

"If the United States insists on imposing another round of tariffs on Chinese products, China will definitely take countermeasures to safeguard its legitimate rights and interests", foreign ministry spokesman Geng Shuang said. "First, given the balance of Apple's economic footprint, the burden of the proposed tariffs will fall much more heavily on the United States than on China".

Investors are also on the edge about any contagion risks from turmoil in some emerging markets (EM) including Argentina and Turkey whose currencies have been routed recently.

One interesting detail in that Marketplace report: Cheap Chinese labor, contrary to popular opinion, is not the source of most of the savings achieved by building iPhones in China.

STRONG JOBS REPORT: Investor sentiment was supported by upbeat economic data out of the US on Friday that showed the pace of hiring quickened in August and wages growing at their fastest pace in nine years. It makes many of its products for the USA market in China, and it also sells gadgets including the iPhone in China, making them a potential target for Chinese retaliation against the Trump tariffs. The economy added a strong 201,000 jobs and the unemployment rate stayed at 3.9 per cent, near an 18-year low.

The president's comments Friday added to the uncertainty on trading floors, which have also been hit by concerns of a brewing financial crisis in emerging markets.

Investors will next focus on USA inflation for August due Thursday and a stronger number could once again send the dollar surging. It added that substantial tariff increases will limit its ability to reinvest in USA operations, affecting employees engaged in R&D, design, other support operations. Brent crude, used to price worldwide oils, gained 65 cents to $77.48 a barrel.

Spot gold was a tad softer at $1,193.01.

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