China trade news sends market on roller coaster as France, Brazil, Argentina targeted by tariffs
Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Donald Trump and his administration with this weekly recap compiled by The Fly:
1. CHINA TRADE TALK UP AND DOWN: On Tuesday, President Trump told reporters in London that it might be better to wait until after the 2020 election to reach a trade deal with China. CNBC quoted the U.S. leader as having said: "In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right." When asked if he had a deadline for the deal, he added: "I have no deadline, no ... In some ways I think it is better to wait until after the election, if you want to know the truth."
Then, the next day, Bloomberg reported that the U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a "phase one" trade deal. People familiar with the talks said that President Donald Trump's comments yesterday downplaying the urgency of a deal shouldn't be understood to mean the talks were stalling, the report added. U.S. negotiators expect a phase-one deal with China to be completed before American tariffs are set to rise on December 15, the report also said.
2. USTR PROPOSES TARIFFS ON FRENCH GOODS OVER DIGITAL 'DISCRIMINATION': On December 2, the U.S. Trade Representative completed the first segment of its investigation under section 301 of the Trade Act of 1974 and concluded that France's Digital Services Tax discriminates against U.S. companies, is inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies. Specifically, USTR's investigation found that the French DST discriminates against U.S. digital companies, such as Google (GOOG, GOOGL), Apple (AAPL), Facebook (FB), and Amazon (AMZN). In addition, the French DST is inconsistent with prevailing tax principles on account of its retroactivity, its application to revenue rather than income, its extraterritorial application, and its purpose of penalizing particular U.S. technology companies, the USTR said. USTR is issuing a Federal Register notice explaining that, for the reasons set forth in the report, the French DST is unreasonable, discriminatory, and burdens U.S. commerce. The notice solicits comments from the public on USTR's proposed action, which includes additional duties of up to 100% on certain French products. The notice also seeks comment on the option of imposing fees or restrictions on French services. The list of French products subject to potential duties includes 63 tariff subheadings with an approximate trade value of $2.4B. "USTR's decision today sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on U.S. companies," Ambassador Robert Lighthizer said. "Indeed, USTR is exploring whether to open Section 301 investigations into the digital services taxes of Austria, Italy, and Turkey. The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets U.S. companies, whether through digital services taxes or other efforts that target leading U.S. digital services companies."
3. FACEBOOK DOUBLES DOWN ON POLITICAL AD POLICY: Also on December 2, Facebook CEO and co-founder Mark Zuckerberg reiterated his support of the social media giant's move to not take down political ads that contain false information, CBS News reported. "What I believe is that in a democracy, it's really important that people can see for themselves what politicians are saying, so they can make their own judgments. And, you know, I don't think that a private company should be censoring politicians or news," Zuckerberg told "CBS This Morning" co-host Gayle King. "But a small group of your employees... about 200 wrote a letter saying that they wish that you would reconsider. 'Because,' they said, 'free speech and paid speech are not the same,'" King said, adding, "Do they have a point?" "Well, this is a clearly a very complex issue, and a lot of people have-- have a lot of different opinions," Zuckerberg said. "At the end of the day, I just think that in a democracy, people should be able to see for themselves what politicians are saying." Zuckerberg later added that U.S. President Trump did not discourage him from banning political advertisements on Facebook during a meeting with the president in October, the report noted.
4. INJUNCTION STOPS TRUMP MOVE TO CLOSE SOLAR TARIFF LOOPHOLE: On Thursday, Bloomberg reported that the U.S. Court of International Trade has issued a preliminary injunction temporarily blocking the Trump administration's attempt to kill a provision that exempted bifacial, our double-sided, solar panels from tariffs, . Publicly traded companies in the solar space include Canadian Solar (CSIQ), First Solar (FSLR), JA Solar (JASO), SunPower (SPWR), Trina Solar (TSL) and Yingli Green Energy (YGE).
5. TRUMP RESTORING STEEL, ALUMINUM TARIFFS ON BRAZIL, ARGENTINA: On Monday, President Trump tweeted: "Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries. The Federal....Reserve should likewise act so that countries, of which there are many, no longer take advantage of our strong dollar by further devaluing their currencies. This makes it very hard for our manufactures & farmers to fairly export their goods. Lower Rates & Loosen - Fed!" Publicly traded companies in the steel space include AK Steel (AKS), ArcelorMittal (MT), Nucor (NUE), Steel Dynamics (STLD), TimkenSteel (TMST) and U.S. Steel (X). Alcoa (AA) is among aluminum levered stocks.
"Week in Review" is The Fly's weekly recap of its recurring series of "Trump Effect" exclusive stories.