Australia’s share market, or the All Ordinaries Index (INDEXASX: XAO)(ASX: XAO) is expected to have a painful day today with investors worried about the trade war again.
What Happened?
After the share market had closed, US President Donald Trump sent out some more of those famous tweets to send shudders through investor ranks.
I’m sure you remember that over the past year President Trump has implemented a number of tariffs on various Chinese goods over the past year and a half.
But he’s now at a stage where he’s put a tariffs on pretty much all of the Chinese goods already. So what financial pressure could the US put on China?
Increasing the tariff rate is Trump’s plan, even though it’s American consumers and businesses that are paying the tariffs to the US coffers.
In his tweets the US president announced the US could increase tariffs on $250 billion of Chinese goods to 30% from 25% starting from 1 October 2019.
He also said that planned tariffs for $300 billion of imports will be implemented at 15% rather than 10%.
Some of these tariffs had already been delayed on products like clothing and electronics. They were scheduled to come in at the start of September but were delayed to mid-December to make sure it didn’t hurt the imperative Christmas shopping season.
Another tweet said he had ordered American companies to consider alternative manufacturing locations instead of China, suggesting the US would be the best place to make things.
This of course had a negative impact on many US shares, particularly ones with a link to China. For example, the Apple Inc. (NASDAQ: APPL) share price fell 4.6%. Most other shares were affected too, the Alphabet Inc (NASDAQ: GOOGL) share price also fell by over 3%.
What Will The ASX Do?
I wouldn’t be surprised to see many of the ASX shares that are linked to China affected today as well such as BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG).
There’s likely to be a lot of red today, except the gold miners perhaps. But it could also throw up an opportunity or two. Some of the ones to consider could be the reliable shares in the free report below.
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