Trump Decision on Trade Sanctions Hit Asian Markets
The growing trade conflict between the US and China provoked a new wave of capital outflow from the developing markets and crashed market indices worldwide. What’s more, the White House declaration on introducing trade taxes on almost the whole list of goods imported from China worth yet another $ 200 billion made the Chinese stock market fall.
This tendency swept Asian markets into an evident decline: the MSCI's index of shares in Asia Pacific outside of Japan lost 0,6%. Basic indices went down on European markets as well. The Euro Stoxx 50 index of eurozone blue chip stocks decreased by more than 1%.
According to experts, the situation will be only worsening. China’s commerce ministry already warned they would have to provide equal response. But they can’t, economists, say as the American import to China amounts only to $170 billion per year. However, China can hamper the activity of large American companies (Ford, GM, Apple) on its territory, that earn large profits there.
In any case, if the trade conflict grows the global economy will suffer. Investors will switch to buying government bonds of developed states, such as USA and Germany. That will hit, first of all, the developing markets that already witness the capital outflow.