The newest moves denote a new stage in a full-scale trade war among the world’s two major economies. More escalation is considered probable since Trump is facing low popularity ahead of the US midterm elections in coming 60 days, while China doesn’t like to give up too. However, it’s hard for China to retaliate as its imports don’t fit a good number compared to US. The US clearly knew what will happen at last, else the escalation of trade war could be useless.

Trump also has the idea to add more tariffs up to 25% on the same number of Chinese products showing his firm stance to let domestic producers to improve their businesses and therefore to increase their interests. This also seems an appropriate upcoming growth in forex markets.

The fallings in Chinese stock markets recently also show that the tariffs are working as one of the clear signals in many economies is stock markets growth.

Apple has been considered on the newest round of planned tariffs the Trump government is thinking of imposing against China (on almost $200 billion of goods) and the news isn’t a good one. In a message to the US Robert Lighthizer, Apple clarified reasons many people recognize, specifically that on the face of it, tariffs harm financial basics of companies, customers and nations; the foundations that can’t be moved or changed over a night.

The inquiry actually isn’t whether they will, it’s about whether over the average to lengthier term, tariffs can enforce the conflicting sides to come to terms which are more helpful. In this logic, we assume every person with a little attention to support in contradiction of the suggestion because eventually the bottom line is going to show some undesirable result. If still the real goal is to not just involve in a minor act, it still seems unnecessary.

Apple went on to describe what we’ve supposed in the past about how the US office of trade is excessively naive and only counts the total price of the final product which is shipped from the last country it hits in its production. This clearly discounts a lengthy list of values realized and spread elsewhere all over the production chain in countries other than China.

It seems that, according to the prime policy of the Trump administration that suggested to “get back all the jobs to US”, this move against Apple might give the company a chance to review its overseas policies. However, the main reason Apple produces in China is its cheap production chain and such a thing is impossible in US. Even if cheaper workers like the ones in China are employed in US, many supply chains that exist on Chinese soil won’t be available on US soil which in turn rises the simplicity of Trump administration on not considering all aspects of an economic decision as many parameters in economy work in chain to one another.

Are trade war sides looking for an opportunity to ally to hit China first and comeback and finish one another? How a harsh decision becomes so soft that remains untouchable in a hot summer where farmers prepare to start cultivation for coming autumn? Here we, the ICDST, explain how the tariff war might go to its hidden phases with much more devastation and incurable long term effects. Read more with us!

The United States and the European Union want to move towards “zero customs tariff” in non-automotive industrial trade, announced US President Donald Trump after a meeting with the President of the European Commission, Jean-Claude Juncker. This withdrawal happened few days after U.S. dollar sinking proving this fact that US is not able to be in a long term trade war.

Donald Trump and European Chief Executive Jean-Claude Juncker strove on Wednesday to defuse the crisis created by tariffs imposed by Washington, announcing a series of decisions in agriculture, industry and energy whose scope exact remains to be confirmed. After a two-hour meeting, the two leaders spoke in front of the press in the gardens of the White House.

“Zero tariffs” in their industrial exchanges, with the exception of the automotive sector
Speaking of a “big day” for free trade and evoking a “new phase” in relations between the United States and the European Union, the US president stressed their common will to move towards “zero tariffs” “in their industrial exchanges. the exception of the automotive sector.

He also assured that the EU would begin “almost immediately” to buy “a lot of soybeans” from US producers, and promised to revisit the issue of US tariffs on steel and aluminum, which had fired with powders.

According to a European source, no new customs tariff will be imposed on imports of European cars into the United States, a particularly sensitive issue for Germany, where this key sector employs some 800,000 people.

Our Analysis

Here at ICDST, we predict that the new confrontation goes to a hidden phase where parties will hit by means of certain import restrictions and by finding alternative partners in their trades. The new hidden trade war is even more dangerous as the decisions made or the steps taken are somehow unknown to other parties and finding the right measures will be more difficult. It seems that in near future there will be many invisible diplomatic connections between EU and China for countering US. However, China will be a main loser if it doesn’t attack first as the best defense is attack now that the future of EU/US China relations is unknown.

Bitcoin prices recovered on Monday after falling to $ 5,787 on Sunday, marking its lowest price so far in 2018, with Japan’s regulator calling for improved measures across the board.

By ICDST. Bitcoin fell to $ 5,787 on Sunday, down more than 70% from its December high of almost $ 20,000.

The drop in prices follows the announcement that Japan’s Financial Services Agency (FSA) has ordered six crypto trading platforms to improve their businesses and some security issues these currencies always face.

Companies must submit their plans by July 23, according to FSA.

“The market continues to be on a downtrend and has not yet managed to exit which makes it vulnerable to massive sales,” said Ryan Rabaglia, chief negotiator for the cryptocurrency firm Octagon Strategy Ltd. in Hong Kong. “Although the market has reacted negatively, I see this as positive for the industry as a whole.”

Bitflyer, QUOINE, BitBank, BTCBOX, BITPoint Japan and Tech Bureau were the trading platforms penalized by the FSA.

Wednesday night, millions of dollars were sold following the announcement of a security breach Bithumb, based in South Korea. The platform announced Wednesday morning in Asia that it was hacked and that cryptocurrencies worth 35 billion won ($ 31.5 million) were stolen.

Gold prices rise slightly on Monday as the dollar recedes, while trade concerns between the US and China also support bullion. The gold futures for the August delivery on the Comex division of the New York Stock Exchange gained 0.2% to $ 1,273.60 per troy ounce.

By ICDST. The United States is considering declaring that China’s investment in US technology companies is a threat to economic and national security, according to information released on Monday, citing eight people familiar with the issue.

The news also indicated that US Treasury Secretary suggested implementing the law in a report scheduled for release on June 29.

On Friday, US President threatened to impose a 20% tariff on all US imports of cars assembled by the European Union, which would heighten trade tensions with Europe.

In response, a senior European Commission official said the EU would respond to any US initiative to raise tariffs on cars made in the bloc.

Meanwhile, the dollar index , which measures the greenback against a basket of six major currencies, fell this morning and was trading at 94.4960. The USD has strengthened since April, but the looming trade war is starting to create nervousness in the market.

Dollar-denominated assets, such as gold, are sensitive to dollar fluctuations. A falling dollar makes gold cheaper to foreign currency holders and, as a result, increases demand for the precious metal.

In the other precious metals trade, silver fell 0.54% to $ 16.370 per troy ounce, while platinum gained 0.35% to $ 878.10 an ounce.

The 28 Member States of the European Union approved on Thursday the retaliatory measures against some US products in response to the taxes imposed by Washington on steel and aluminum, told AFP several European sources. “The implementation of these measures has been adopted unanimously” by the Member States and the European Commission will take steps for their entry into force, said these sources.

European countermeasures may legally come into force from June 20, but the EU could wait until July 1 to react with Canada, also sanctioned by Washington, who wants to launch the retaliation that day said a diplomatic source. The European list contains dozens of American products, some of which are very emblematic, such as bourbon, Harley Harley-Davidson motorcycles and jeans. Here is the detail:

● Steel

Dozens of products like some rolled steels, stainless steel bars, seamless tubes, steel wires, doors, windows, etc.

● Agriculture and food

Beans, corn and rice (processed or not), lingonberries, orange juice, peanut butter, bourbon, cigars, cigarettes, pipe tobacco, rolling, chewing or snuffing .

● Textile

T-shirts and undershirts in cotton, wool or synthetic material, denims (ie jeans) or cotton pants, shorts, cotton bedlinen and some leather shoes .

● Vehicles

Motorcycles with a cylinder capacity greater than 500 cm3, sailing, pleasure or sport boats, with or without motor, rowing boats and canoes.

● Various

Eye makeup, nail polish, foundation and playing cards.

The list must be returned by the European Commission – a formality – before its execution.

The measure aims to offset up to 2.8 billion euros the damage caused to his industry by US taxes on steel (25%) and aluminum (10%). This figure is considered “measured” by the Commission, which wants the procedure to fully respect the rules of the World Trade Organization (WTO).

The list was communicated by the EU to the WTO on May 18, in anticipation of Washington’s decision. The affected products are manufactured in the US and not sold by US brands – otherwise they would be likely to be manufactured anywhere in the world. The EU targets several US states, often agricultural, which voted for Donald Trump in 2016. Other US products could in the future also be taxed by the EU, up to 3.6 billion euros, if it won the dispute with the United States in the WTO since its complaint on June 1.

Source and analytics by ICDST economy group.