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American actions have destroyed all the gains accumulated after the Donald Trump elections, after the President’s prices on Washington’s largest trade partners have sparked fears of serious damage to the world economy.
The S&P 500 – which reached a record level less than two weeks ago – closed 1.2% Tuesday, below its level of November 5, during a session marked by violent swings.
The nasdaq composite heavy with technology closed 0.4% less, after recovering some of its previous losses.
The movements occurred after the 25% prices of Trump on imports from Mexico and Canada entered into force on Tuesday, triggering the indignation of the neighbors of the United States and attaching the fears of a trade war.
The White House also imposed an additional 10% levy on goods from China, in addition to the tariff of 10% last month, as the president’s protectionist policies fueled investors’ concerns concerning a global economic slowdown.
“A World Trade War is a losing situation for everyone,” said Alain Bokobza, head of the world’s world allowance at Société General. “Some people will lose relatively more than others, but everyone will lose.”
The US stock market has been touched in recent days, unlike the Rallye who has followed Trump’s triumph in the polls, when investors have bet that his promise to reduce corporate taxes increases.
“This is what happens when a market that was at the cost of perfection sees what they wanted to see the least: prices and slowdown in growth,” said Steven Gray, director of investments at Gray Value Management.
The President’s prices against the three largest trade partners in the United States have increased the rights of some of the highest levels for decades, with the prospect of additional increase as tensions increase even more.
Prime Minister Justin Trudeau said the reason indicated by Trump prices – the cross -border trafficking in fentanyl – was “completely false” and suggested that the American president really wanted to trigger “the total collapse of the Canadian economy because it will facilitate the end of us”.
He added that Ottawa would retaliate with an immediate price of 25% on 30 billion Canadian dollars (US $ 21 billion) of American imports and prices on another CA of $ 125 billion in American products 21 days later.
Ontario, the most populous province in Canada, said that it would immediately be ripped off with Starlink, the Internet satellite supplier founded by Elon Musk and United States Societies in government calls for tenders. He also announced that he would no longer sell alcoholic drinks for American manufacture.
While Mexico is waiting on Sunday to reveal the countermeasures, China said that it would preserve a tariff of 10 to 15% on American agricultural goods, ranging from soybeans and corn and wheat beef from March 10.
Even before this week’s prices, some American economic indicators have reported possible problems to come.
A survey by the American Association of Individual Investors has shown that investors’ confidence had plunged close to a hollow of all time at the end of February, while the estimate of American GDP growth by the Federal Reserve Bank of Atlanta, published on Monday, underlined a contraction of 2.8% in the first quarter.
Banking shares – which are sensitive to economic tremors – underwent a sharp drop on Tuesday, the KBW Bank index fell 3.6%.
Citigroup and Bank of America dropped 6.3% on Tuesday. Morgan Stanley lost 5.7% and Goldman Sachs lost 4%.
