Trade war|US President Donald Trump’s customs decision shakes the stock market. According to first information, the biggest attack comes to the United States.
Investors scared on Thursday of the US President Donald Trump Imported duties imposed on the escalation of the trade war.
The shares were significantly cheap in Asia as the largest duties are targeted at products imported from Asian countries to the United States.
For example, the Nikkei 225 index on the Tokyo Stock Exchange weakened 2.8 per cent on Thursday and the Hong Kong Stock Hang Seng index was 1.6 per cent.
Trade wars cause interference to the economy, which usually lead to slowing down economic growth over time. The detailed effects of customs duties on companies or households are still very difficult to assess.
However, it is almost inevitable that duties lead to rising prices in the United States. In Europe, prices, on the other hand, may be degrading if Asia starts selling products to Europe at dumping prices.
This would be a serious blow to European companies and would probably slow down economic growth within a short period of time.
The Bank of Finland estimates in its March in a risk assessmentthat, due to duties, economic growth in the euro area would reduce 1.5 percentage points. This would mean that the gross domestic product of the euro area would be reduced this year.
The Bank of Finland estimates that the growth of the global economy will decline by 0.5 percentage points this year.
On Thursday The cheapness of the shares in Europe was more moderate than in Asia. The broad European stock index Europe Stoxx 600 weakened by 2.0 percent in the afternoon. The general index on the Helsinki Stock Exchange was 1.7 per cent.
The stock market interpreted Thursday that duties cause the most problems for US companies. Future, which predicts the world’s most important stock index development, weakened by 3.1 per cent at 1 pm Finnish time.
Trading in the US stock market starts at 4:30 pm Finnish time.
President Trump Late Wednesday announced Finnish time from new import duties to goods imported from around the world. He ordered 20 % duties for products imported from the European Union.
For example, the new customs produced from China is 34 percent, 26 % for Indian imports, 10 % for Brazilian imports and 10 % for British imports.
In addition, Trump said, according to AFP news agency, that he would set a general 10 % general level for import duties in other states.
“If you want your customs to zero, make your products here in America,” Trump said according to AFP.