Wall Street heads lower after US-China trade war escalation

US producer prices rose 2.7% y/y in March, slowing down from 3.2% in the previous reading, while analysts expected a 3.3% rise.

Core prices excluding food and energy, rose 3.3%, down from 3.5% in February, and below estimates of 3.6%.

US stock indices fell on Friday amid an escalating US-China trade war, threatening the global economy with a recession.

In yet another escalation to the devastating US-China trade war, Beijing raised tariffs on all US goods from 84% to 125%.

It’s in response to US President Donald Trump’s 145% tariffs on US goods, which were confirmed yesterday.

The latest escalation comes after a long series of reciprocal measures between both sides starting January 2018, when the US imposed tariffs on Chinese goods and accused China of unfair trade practices. 

China asserted it will “fight till the end” and warned Trump that any escalation will be faced with similar responses.

China said it won’t respond to any more tariff hikes from the US as it would be meaningless after this point, with American products already losing their viability in the Chinese market.

Bloomberg that China has restricted rare earth metals exports to near zero in response to the war. 

On trading, Dow Jones fell 0.5% as of 15:13 GMT, or 197 points to 39,397 points, while S&P 500 shed 0.5%, or 25 points to 5242 points, as NASDAQ gave up 0.4%, or 67 points to 16,320 points.