As Uber goes ahead with IPO
Trump’s tariffs come into effect as trade talks stumble
US Customs and Border Protection raised duty on $200 billion of Chinese goods from 10% to 25% amid threats of retaliatory measures from Beijing. Mr Trump has warned he will introduce 25% duties on $325bn of Chinese goods.
Tension spread to the markets with the Dow Jones down 138 points, S&P500 futures down 2.8% and Japan’s Nikkei down by 0.7%, although the Hang Seng index in Hong Kong was trading up 0.6% and the Shanghai Composite was 1.5% higher.
Mr Trump said on Sunday that he would raise tariffs after China tried to renegotiate terms of a trade deal. Nevertheless, talks continued in Washington between Chinese Vice-Premier Liu He and US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
As late as last night there were hopes of a breakthrough and Mr Trump said he had received a “beautiful letter” from Chinese counterpart Xi Jinping and that they would probably speak by phone. Talks are expected to continue into Friday.
Gary Shapiro, chief executive of the US Consumer Technology Association said the tariffs would be paid by American consumers and businesses, not China, as the US President has claimed.
“Our industry supports more than 18 million US jobs – but raising tariffs will be disastrous,” he said.
Despite the market turmoil, one of the biggest flotations of recent years went ahead. Taxi hailing firm Uber Technologies priced its initial public offering at $45 (£35) per share – the low end of its targeted range and giving the 10-year-old company a valuation of $82.4 billion.
Uber hoped the price would help it avoid the same fate as rival Lyft, which is down 23% from its IPO price in late March. Uber has never made a profit nor paid a dividend and last year reported an adjusted loss of $1.8bn. However, revenue rose 24% and it enjoyed a 37% rise in gross bookings.
The share issue was oversubscribed and its valuation is almost a third less than its investment bankers predicted last year but still above its most recent valuation of $76 billion in the private fundraising market.
Shares in Uber begin trading on the New York Stock Exchange on Friday.