Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: 4.8
Article rating: 5.0
Article rating: 3.0
Article rating: No rating
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: 4.5
Article rating: No rating
Article rating: No rating
Article rating: 4.2
Article rating: 5.0
Article rating: 4.0
Article rating: No rating
Article rating: No rating


Global Trade War Escalates To New Heights

Author: Arpit Chandna/Wednesday, July 18, 2018/Categories: Commodities

Global Trade War Escalates To New Heights

The trade war between two of the world’s largest economies — US & China — got worse when the Donald Trump administration slapped another 10 per cent tariffs on $200 billion worth of Chinese goods such as fish, petroleum, chemicals, handbags and textiles. This comes on the heels of both countries imposing tariffs on each other's goods, worth nearly $70 billion, on July 6. Global markets were rattled by the escalating war as another move could derail the expected global economic growth outlook.

While Beijing did not respond with a retaliatory tariff, it is planning to use funds collected from tariffs charged on imports from US to minimize the impact of US trade restrictions on its domestic companies. Separately, the Chinese manufacturing sector is looking for alternative supplies of commodities as it has also imposed tariffs over its import. 

As an impact of the trade tensions, last month’s trade surplus as per Reuter’s estimation reached a record high of $28.97 billion which in May was $24.58 billion. As per China General Administration of Customs, China’s June exports rose 11.3 per cent y-o-y and is also higher than May’s gaining levels of 12.6 per cent. For the six-month period from January to June 2018, China’s trade surplus rose to $133.76 billion as compared to $117.57 billion in the same period last year.

Impact of trade war

The ongoing trade dispute has heightened worries in the global markets of derailing the expected global economic growth outlook. Chinese stocks are currently trading in bearish zones and the Chinese currency Yuan is taken a hit. The market expects trade flows to slow down, which means demand support to base metals will be weak in the second half of the year. China is the world’s largest metal consumer and any measure on its export will automatically reduce the volumes of intake from its industrial sector. Hence the aggressive stance of US is going to hurt the demand side fundamental outlook, but at the same time any of the supply shrinkage could lend some support to the prices.

The author is a fundamental analyst at Karvy Comtrade

Print Rate this article:

Number of views (520)/Comments (0)

rajyashree guha

Arpit Chandna

Other posts by Arpit Chandna
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free