The mar­kets to­day

The Prince George Citizen - - Money -

TORONTO (CP) — North Amer­i­can mar­kets en­dured one of the worst weeks of the year as height­ened trade ten­sions be­tween the United States and China rat­tled in­vestors.

U.S. Pres­i­dent Don­ald Trump’s de­ci­sion Thurs­day to add 10 per cent tar­iffs on US$300 bil­lion of Chi­nese goods as of Sept. 1 was the dom­i­nant is­sue in a risk-off day as the Chi­nese vowed to re­tal­i­ate.

“It seems like the trade wars, par­don the pun, trump all else,” said Al­lan Small, se­nior in­vest­ment adviser at Hol­lisWealth. He said U.S. consumers will be more af­fected by this round of tar­iffs than the ear­lier 25 per cent on US$250 bil­lion worth of im­ports that were strate­gi­cally placed to avoid tech­nol­ogy gadgets and other pop­u­lar items.

“We’re see­ing a lot of peo­ple up in arms about this 10 per cent and of course, who knows, if noth­ing hap­pens 10 could eas­ily be­come 25 very quickly.”

The un­known man­ner in which China will re­tal­i­ate if a big con­cern, Small added.

Will they in­crease tar­iffs of their own, limit ac­cess to China’s large sup­ply of rare earth el­e­ments used in bat­ter­ies, and buy fewer U.S. trea­suries? “I think ev­ery­one is a lit­tle bit ner­vous as to what the re­tal­i­a­tion from the Chi­nese will be,” he said in an in­ter­view. Some mar­ket watch­ers ex­pect a ramp up of trade war rhetoric could prompt the Fed­eral Re­serve to fur­ther cut in­ter­est rates in the com­ing months. But Small said that will have lit­tle im­pact on cor­po­rate busi­ness de­ci­sions.

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