Last week markets continued their rollercoaster ride over trade. Negotiations-vs-Trade War, which is it?
The week opened with China retaliating to the US metal’s tariff. $3B in US goods will be tariffed, with an emphasis on US Agriculture–an attempt to target a dependent US industry as steel is counter dependent on the US.
The US outlined $50B worth of goods from China to be subject to tariffs. This response revealed tariffs on 1,300 products. An evaluation and exemption period will extend for 60 days stalling the implementation of these tariffs.
On response to US tariffs announced on Tuesday China responded in kind with $50B in tariffs on US goods. Including Aircrafts, Cars, and US Agriculture.
President Trump formally requested the US Trade Representative for a list of tariffs that could be levied against $100B worth of Chinese imports.
China Commerce Ministry Spokesman Gao Feng did not hesitate to indicate a “fierce counter strike” should be expected.
Some would call it a trade war; but seeing as how both sides seem open to negotiations and issued tariffs do not take effect for 60 days, it would appear there is time for things to de-escalate. Valuations have retreated from their highs. Also, the weak jobs data, was still a positive, but just negative enough to hopefully forestall a Federal Reserve rake hike till late summer.
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