July 6, 2018, by Natasha Doff
President Donald Trump fired the biggest shot yet in the global trade war by imposing tariffs on $34 billion of Chinese imports. The duties on Chinese goods started at 12:01 a.m. Friday in Washington, just after midday in China. Another $16 billion of goods could follow in two weeks, Trump earlier told reporters, before suggesting the final total could eventually reach $550 billion, a figure that exceeds all of U.S. goods imports from the Asian nation in 2017. Beijing, which called the moves “typical trade bullying”, said its retaliatory tariffs are now in effect, and argued it had been forced to act.
At 8:30 a.m. Eastern Time, payrolls data for June are released, with economists surveyed by Bloomberg expecting 195,000 new positions added in the month, down from 223,000 in May. The unemployment rate is expected to hold at 3.8 percent, and average hourly earnings growth is seen staying put at 0.3 percent. Investors will be on the lookout for signs that the global expansion continues after Germany posted a stronger-than-expected jump in industrial production earlier on Friday.
Kim and Putin
U.S. Secretary of State Mike Pompeo arrived in North Korea on Friday for his third visit since April. He struck a cautious note while en route to the isolated nation saying he was seeking to firm up pledges that North Korean leader Kim Jong Un made last month during his Singapore summit with Tump. Meanwhile, preparations are already in full swing for the next big date on the U.S. foreign policy calendar: a tete-a-tete with Vladimir Putin. A senior Russian official told Bloomberg News that Kremlin officials are in intense negotiations with their counterparts in Washington to strike a deal that would allow Trump to tout his upcoming summit with the Russian president as a triumph that justifies steps to repair relations.
Markets on edge
Overnight, the MSCI Asia Pacific Index advanced 0.6 percent, while Japan’s Topix index closed 0.9 percent higher as the yen traded little changed. China’s Shanghai Composite Index climbed 0.5 percent. In Europe, the Stoxx 600 Index was flat at 5:50 a.m., and the euro rose. S&P 500 futures pointed to a retreat at the open, the 10-year Treasury yield was at 2.84 percent and gold retreated.
Trump said he’s narrowed his choice to replace retiring Supreme Court Justice Anthony Kennedy to four people and he expects to make a decision by Sunday. Three federal appeals court judges have emerged as his favorites: Amy Coney Barrett, Brett Kavanaugh and Raymond Kethledge, two people familiar with the matter told Bloomberg News. Among the three, Trump currently favors Kavanaugh and Kethledge over Barrett, according to the people. The president would neither confirm or deny that the three judges are among his finalists.