US, China dealing with trade negotiations at highest levels

Virginia Carson
January 7, 2019

Beijing responded by imposing penalties on $110 billion of American goods, slowing down customs clearance for US companies and suspending issuance of licenses in finance and other industries.

The bruising trade war comes as China grapples with a slowing domestic economy.

The iPhone survived and thrived despite the 2008 financial crisis and a long list of cheaper smartphone alternatives and copycats, eventually catapulting Apple to become the most valuable company in the world.

Apple's stock fell 9.96 percent after CEO Tim Cook said told investors Wednesday the company lowered its revenue guidance to $84 billion from the $89 billion to $93 billion it had previously projected.

Beijing on January 4 cut bank reserve requirements for a fifth time this year amid slowing growth at home and the punishing United States tariffs on exports.

"It's hard to square recession worries with the strongest job growth we've seen in years", said Alec Young, managing director of global markets research for FTSE Russell.

He also said that China "is not doing well now, and it puts us in a very strong position". "And if we don't, they're paying us tens of billions of dollars worth of tariffs - not the worst thing in the world". "We believe the economic environment in China has been further impacted by rising trade tensions with the United States", Cook said.

Sen. Elizabeth Warren visits Council Bluffs
Before the DNA test, Warren long offensively cited her grandfather's "high cheek bones" as evidence of her Native heritage. Just before speaking, the power went out at McCoy's Bar, Patio and Grill, leaving Warren to speak in the dark.

The president downplayed the effects of the economic woes on USA technology giant Apple Inc, which this week blamed slowing iPhone sales in China for a rare reduction in its quarterly sales forecast.

Wall Street analysts, who had been peppering Apple's stock with downgrades in recent months, have been concerned the company would suffer declines in iPhone unit sales over the next couple of years.

Shares of Apple closed at US$148.26 apiece on Friday, down about 5.1 per cent this week.

Following the Apple warning, chip stocks of Advanced Micro Devices, Nvidia, Skyworks and Qorvo all took a tumble, along with semiconductors.

With its decade of rapid iPhone sales growth over, Apple shifted to trying to get customers to pay more for each device they did buy, launching the $1,000 iPhone X in 2017 and the new iPhone XS and XS Max past year, the latter of which can cost as much as $1,449.

Although non-phone categories, including the Mac, Apple Watch and iPad, grew 19 per cent worldwide, Cook noted that more than 100 per cent of the company's fourth quarter year-over-year revenue decline occurred due a drop in Chinese sales of iPhones and other Apple product.

"Apple makes their product in China", Trump said. "China is the biggest beneficiary of Apple, more than us, because they build their product mostly in China", Trump said.

Apple Priced Itself Out of Shrinking Chinese Smartphone Market
Technology companies and other major exporters, including heavy-machinery companies, also took big losses. Apple shares slid some 7.6 per cent in after-hours trade on the news .

The Dow dropped 660 points, or 2.8%, on Thursday after Apple warned it will badly miss its quarterly sales forecast because of weakening growth and trade tensions in China.

China's commerce ministry said a USA trade delegation led by Deputy Trade Representative Jeffrey Gerrish will visit China on Monday and Tuesday. Apple's (APPL) announcement rattled investors and global markets. The talks begin on December 31.

A team led by Deputy US Trade Representative Jeffrey Gerrish will travel to China for talks, China's commerce ministry said in a statement on its website on Friday, news that helped boost global markets.

While Trump and other officials have said talks between the two sides are progressing well, they have given few details on concessions that China has made.

"We see the potential for further downside to FY19 numbers depending on the trajectory of Chinese demand in early 2019", Hall said in a note to his clients obtained by CNBC on Wednesday.

The economy created 2.6 million jobs a year ago compared to 2.2 million in 2017. Preliminary discussions have been "a little more optimistic than usual", White House economic adviser Larry Kudlow told Bloomberg TV Friday.

Five talking points ahead of Manchester City's title showdown with Liverpool
But Pep Guardiola had a boost to his plans on Wednesday when Belgian playmaker De Bruyne trained with the squad. While City have stuttered in recent weeks, Liverpool have been in fine form, winning their last nine games.

Other reports by

Discuss This Article