Gold Silver Reports (GSR) – The move threatens to unravel efforts by top U.S. and Chinese trade officials to lower the heat and reach an agreement that could stave off an escalating conflict, after the release of a list of tariff targets earlier this week prompted immediate threats of retaliation from Beijing.
U.S. stock futures dropped on Trump’s latest trade directive to the U.S. Trade Representative. S&P 500 Index futures slid as much as 1.6 percent, after the underlying gauge ended up 0.7 percent Thursday. Asian equities were mixed, while the yen rose.
“In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs,” Trump said in a statement issued by the White House.
A White House official later said the $100 billion figure Trump used in the statement referred to the value of the imports that would be covered by the additional tariffs, not the total amount of tax that would be charged on the products.
Xinhua, China’s state news agency, said Friday that Beijing was committed to defending its interests “against new U.S. actions.” A request for comment on the Trump statement from China’s Ministry of Commerce wasn’t immediately answered. Government offices are closed on Friday for the annual tomb-sweeping holiday.
“This is starting to feel like the beginnings of a trade war, if simply each proposal is matched with a retaliation,” said Patrick Bennett, a Hong Kong-based strategist at Canadian Imperial Bank of Commerce. “The U.S. risks isolating itself from global trade in this process and we think the U.S., USD and U.S. asset markets have more to lose.”
China said Wednesday it would levy a 25 percent tariff on about $50 billion of U.S. imports including soybeans, automobiles, chemicals and aircraft. That was in response to the release by the U.S. of a list of proposed tariffs a day earlier, covering $50 billion in Chinese products.
President Donald-Trump ordered his administration to consider tariffs on an additional $100 billion in Chinese-imports, sending U.S. stockfutures tumbling on concern the world’s two largest economies are hurtling toward a full-blown tradewar.
Read More: Stocks Rally Third Day as Trump Team Eases Stance
Were China to want to match Trump’s latest threat in kind, it wouldn’t have enough American goods imports to target. It could still take other measures — like curbing package tours or student transfers to the U.S., or steps against American companies’ operations in China. – Neal Bhai Reports (NBR)
