TOKYO: Jitters about US tariffs hammered stocks and the dollar again Friday (Aug 11) as President Donald Trump acknowledged the costs from his rollercoaster trade offensive but predicted a “beautiful” ending.
After Trump relented on many tariffs but upped the ante on China, gold rose as discombobulated investors fled to safer assets, while warning lights kept flashing in bond markets and oil fell on recession fears.
The US leader said Thursday that the European Union was “very smart” to refrain from retaliatory tariffs even as the bloc’s chief warned it could tax US Big Tech firms.
“(The EU) were ready to announce retaliation. And then they heard about what we did with respect to China,” Trump said.
Trump acknowledged “a transition cost and transition problems”, but dismissed global market turmoil. “In the end it’s going to be a beautiful thing.”
For investors, the realisation that nothing had been resolved, coupled with Trump’s decision to double down on his battle with economic superpower China, fuelled another bout of selling.
On Wall Street, the broad-based S&P 500 finished down 3.5 per cent on Thursday after soaring 9.5 per cent the day before. The Dow Jones shed 2.5 percent and the Nasdaq 4.3 per cent.
On Friday in Asia, Tokyo sank more than four per cent – a day after surging more than nine per cent – while Sydney, Seoul, Singapore and others were also in the red.
Oil and the dollar slid on fears of a global slowdown while gold hit a new record above US$3,200, as investors spooked by Trump’s erratic policies dumped normally rock-solid US Treasuries.
“The sugar high from Trump’s tariff pause is fading fast,” said Stephen Innes at SPI Asset Management.
“Bottom line: the world’s two largest economies are in a full-blown trade war – and there are no winners.”
