Asian markets rise on talk Biden to roll back some China tariffs
HONG KONG, July 5, 2022 (BSS/AFP) - Asian markets rose Tuesday on growing
speculation US President Joe Biden is about to roll back some of the Trump-
era tariffs on Chinese goods as he looks for ways to rein in inflation,
though sentiment remains at a premium owing to fears of a recession.
The mood on trading floors has become increasingly gloomy in recent months as
observers warn that sharp interest rate hikes aimed at curbing price rises
could cause a contraction, compounding uncertainty caused by Russia's war in
Still, equities were on the up Tuesday on talk that the White House is about
to remove duties on some of the hundreds of billions of dollars worth of
imports from China, with reports saying an announcement could come this week.
With some of the tariffs due to expire soon, officials in Washington have
been discussing the measures with an eye on inflation, which is sitting at
And in a sign that something could be on the cards, China's state-run Xinhua
news agency said Treasury Secretary Janet Yellen and Vice Premier Lui He had
"The two sides agree that as the world economy is facing severe challenges,
it is of great significance to strengthen macro-policy communication and
coordination between China and the United States," it said.
"And jointly maintaining the stability of the global industrial and supply
chains is in the interests of both countries and the whole world."
Reports also said that Biden was considering launching new probes into
industrial subsidies -- allowing for more targeted measures in strategic
areas -- to appease China hawks.
Hong Kong, Shanghai, Tokyo, Sydney, Seoul, Taipei, Wellington, Manila and
Jakarta were all in positive territory.
"Given that inflation remains the White House public enemy number one,
(investors are) leaning toward a gradual rollback of some China tariffs as it
would reduce end costs to US consumers," said SPI Asset Management's Stephen
However, some commentators said that while the removal of some tariffs would
be widely welcomed by traders, they were unlikely to have a long-lasting
effect on inflation.
"Markets are likely to react positively on a knee-jerk because at this point
we are hungry for any signs of positive news," Charu Chanana, of Saxo Capital
"But we don't see the move impacting the global growth and inflation dynamics
in a significant way."
Oil prices rose on expectations that demand will continue to outstrip
supplies as the Ukraine war rages with no sign of an end, while investors are
keeping tabs on China as it sees fresh Covid outbreaks that have led to some
cities being put into lockdown.
Months-long flare-ups in Shanghai and Beijing earlier in the year saw
millions of people ordered to stay home, sending shockwaves through the
domestic economy and battering supply chains.
"China is the real wildcard here: it's going to be two steps forward, one
step back," said Australia & New Zealand Banking Group's Daniel Hynes.
"A demand recovery in China could potentially offset weakness in developed
economies as central banks tighten monetary policy."
- Key figures at around 0230 GMT -
Tokyo - Nikkei 225: UP 0.8 percent at 26,369.24 (break)
Hong Kong - Hang Seng Index: UP 1.0 percent at 22,037.88
Shanghai - Composite: UP 0.2 percent at 3,412.73
Dollar/yen: UP at 136.20 yen from 135.69 yen Monday
Euro/dollar: DOWN at $1.0430 from $1.0431
Pound/dollar: DOWN at $1.2106 from $1.2116
Euro/pound: UP at 86.16 pence from 86.09 pence
West Texas Intermediate: UP 2.3 percent at $110.87 per barrel
Brent North Sea crude: UP 0.6 percent at $114.16 per barrel
London - FTSE 100: UP 0.9 percent at 7,232.65 points (close)
New York - Dow: Closed for public holiday