The deepening trade and technology war between US and China has sent global stock markets sharply lower and prompted a warning from the IMF of the increasing risks to the global economy.
Shares fell sharply in Europe and North America on Thursday as investors took fright at the intensifying war of words between Washington and Beijing, poor news on the American economy, and political chaos in Britain.
Selling continued in the Asia Pacific on Friday with the MSCI’s broadest index of shares outside Japan down 0.2% to a fresh four-month low. It was on track for a third straight weekly loss. The Nikkei was off 0.7% in Tokyo. The FTSE100 was on course to open up slightly later on Friday.
Trump and Abe are expected to address trades during a more formal talk on Monday, but the officials have played down the possibility of a deal during the visit. North Korea’s nuclear and missile programs are also likely to be on the agenda.
Hours after the Japanese conglomerate Panasonic joined the list of companies cutting its ties with the Chinese telecoms giant Huawei, the US secretary of state Mike Pompeo on Thursday accused Huawei’s chief executive of lying when he said the company had no links to China’s communist government.
China has demanded Donald Trump’s administration to change course, while the country’s charge d’affaires in London said the UK could suffer “substantial” loss of investment if Huawei were banned from involvement in Britain’s 5G network. Chinese commerce ministry spokesman Gao Feng said “If the United States wants to continue trade talks, they should show sincerity and correct their wrong actions. Negotiations can only continue based on equality and mutual respect,”. He also claimed, “We will closely monitor relevant developments and prepare necessary responses.”
However later this Thursday Trump called these Chinese telecommunications giants “very dangerous” and also explained how the US complaints against Huawei might be resolved within the framework of a US-China trade deal.
At the White House, Trump said in remarks “You look at what they’ve done from a security standpoint, from a military standpoint, it’s very dangerous,”. “If we made a deal, I could imagine Huawei being possibly included in some form or some part of it.”