- Trump retaliates to not only China but to the Federal Reserve on his own soil.
- Trade wars just turned uglier and are morphing into a full-blown currency war.
There is major news that has hit the circuit today that the US administration will impose an additional 10% tariff on the remaining $300 bln of Chinese imports to the US starting Sept 1. This is a complete surprise to the markets and we are seeing huge variations across all sectors with US 10-year yields now down a whopping -6.44 % at the time of writing, almost 4% of that on this news story alone.
The decision from Trump came following a meeting that took place this morning between the trade representatives reporting back to their president on the Minutes of the Shanghai trade discussions with their Chinese counterparts. In a quick blast of tweets from the president, markets scrambled for the hills, sending the yen further off its cliff to complete a full 1% round trip on the day.
Trump tweeted:
Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal. We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die! Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%...
...We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!
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