Australian share market expected to shed amid new US trade war salvo with China
The Australian stock market is expected to lose billions of dollars when markets open on Monday after US President Donald Trump reignited the trade war with China.
Mr. Trump announced he would impose a 100 percent surcharge on Chinese imports starting Nov. 1 after saying he was disturbed by China’s crackdown on exports of rare earth materials, including those used in the automotive, electronics and defense industries.
Mr Trump’s threats came late on Friday, Australian time, after the Australian stock market closed over the weekend.
Renewed conflict between the world’s two largest economies caused the S&P 500 index of 500 leading US companies, which many Australians hold as part of their retirement, to fall 2.71 per cent on Friday.
Futures contracts on the ASX 200, which includes Australia’s major companies, fell 0.9 percent to 8896 on Monday, giving an indication of the direction of the trend. They closed at 8958.3 on Friday.
That’s still significantly higher than the crash when the market fell to 7169.20 after Mr. Trump’s Independence Day tariffs were announced.
Under China’s new rules, the government will restrict access to rare earth minerals by requiring foreign companies to get special approval to ship them abroad.
The Chinese government will also introduce permit requirements for the export of technologies used in the mining, smelting and recycling of rare earth minerals.
Export requests for products used in military goods will be rejected.
