US/China trade tensions escalate
According to wire reports China has proposed retaliatory tariffs on $60 billion worth of U.S. goods. These goods range from (LNG) to aircraft on Friday. On Friday a senior Chinese diplomat cast doubt on prospects of talks with Washington. Tensions were exacerbated as the US increased pressure for trade concessions from China by proposing a 25% tariff on $200 billion worth of Chinese imports.
In response, China retaliated though has consistently appealed for the US to act rationally to resolve the ongoing dispute. Thus far, the US and China have implemented tariffs on $34 billion worth of each others’ goods since July, with the US cited as being ready to implement tariffs on an additional $16 billion of Chinese goods, which China has already suggested it will respond to immediately. China has to date either imposed or proposed tariffs on $110 billion of U.S. goods, representing the vast majority of China’s annual imports of American products.
In 2017, China imported $130 billion of U.S. goods. China’s finance ministry unveiled new sets of additional tariffs on over 5,000 goods imported from the United States, with the extra levies ranging from 5 to 25 %.
While expected to affect commodity price levels, with majors such as Crude well below 2007-08 highs, the effect seems likely to impact initially more immediately on global equity markets.