New trade war because of Covid-19?

Published on: 04-May-2020
Category: Trading
Last updated: 04-May-2020

New trade war because of Covid-19?

In addition to the aftermath of the corona pandemic, stock exchange prices around the world are being moved by new differences between the USA and China. Investors are gloomy about the past year, when the trade war between the two largest economies dominated economic life. The conflict could now break out again, because US President Donald Trump and his government have made allegations against China. Trump threatens new punitive tariffs because China has lied to the rest of the world about the scale of the virus and the crisis by downplaying the effects at home. US Secretary of State Mike Pompeo also sees China as the culprit for the spread of the virus and wants to hold the country responsible. Pompeo claims to have "tremendous evidence" against China, which he did not provide.

The US government's allegations are reviving investors' fear of another trade war. Wall Street suffered losses at the close on Friday and some exchanges in Asia also closed negatively on Monday. The leading American index Dow Jones lost 2.5 percent on Friday and is now at 23724 points. The broader S&P 500 fell 2.8 percent and the Nasdaq tech index fell 3.2 percent. In Asia, the stock exchanges in Japan and China were closed on Monday. In South Korea, the leading index Kospi lost 2.7 percent and also in Hong Kong and Singapore the prices went out of trading with a little over four percent and 1.9 percent in minus.

And the oil market is also coming under pressure from fears of new customs disputes. American light oil is losing 7.4 percent in value per barrel and the price per barrel of the North Sea Brent is falling by 3.6 percent. After a week of significant gains in the oil market, a new trade dispute could push the price down further.



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