Bonds & Stocks
Global equities retreated after China upped the ante in its trade standoff with the US, stirring fresh concerns over tensions between Beijing and Washington at a time when stocks look stretched after a relentless rally. S&P 500 contracts fell 0.9% and Nasdaq 100 futures dropped 1.1% as China placed limits on five US units tied to one of South Korea’s biggest shipbuilders and threatened further retaliation. All members of the Magnificent Seven slid in premarket trading, while European stocks slipped 0.9%.
Economy
The US is now collecting tariffs on imported timber, lumber, kitchen cabinets, bathroom vanities and upholstered furniture, duties that threaten to raise the cost of renovations and deter new home purchases. The import taxes — initially set at 25% for cabinets, vanities and upholstered wooden furniture — officially took effect on Tuesday at 12:01 a.m. New York time. Imports of softwood timber and lumber, meanwhile, are newly subject to 10% fees. At President Donald Trump’s direction, most of the lumber and furniture tariffs are set to snap even higher in the new year under US — with upholstered wooden products subject to a 30% rate and kitchen cabinets and vanities at 50% as of Jan. 1.
World
The European Union is considering forcing Chinese firms to hand over technology to European companies if they want to operate locally, in an aggressive new push to make the bloc’s industry more competitive. The measures would apply to companies seeking access to key digital and manufacturing markets like cars and batteries, according to people familiar with the plans. The rules would also require the firms to use a set amount of EU goods or labor, and to add value to the products on EU soil.