Trump threatens more tariffs on Chinese goods
The US-China Trade war seems to escalate further each day. The latest indication that things are not getting better is president Trump’s warning to China. The president warned Beijing that if it does not enter a deal with the US, the US will issue higher tariffs. It is hard gauging the wisdom of this as of now, but the eventualities will unfold with time.
Markets Remain Stable
The financial markets on Tuesday and Wednesday remained stable despite the president’s remarks about the tariffs. Some experts are skeptical of this stability, however. The reason for the skepticism is the volatility experienced each time there is a mention of the trade war by either the Chinese or Americans.
The lack of reaction in the financial markets might as well be as a result of the optimism that still exists. While Trump keeps criticizing the Chinese and accuses them of noncooperation, observers still expect a solution soon.
Phase One Talks
Both Washington and Beijing had scheduled to hold talks in September, but none made an effort. This lack of initiative is the major cause of the continued deadlock. Instead of the scheduled talks in September, accusations became rifer from either side especially the US government.
The release of Q3 data by major institutions also contributed to the stalemate. With both economies evidently affected by the existing trade war, experts assume each had to retreat first to save face. What followed was a prolonged period of silence on the Trade war from either country.
An official in the Chinese Treasury claims that both countries agreed to cancel some tariff simultaneously. However, the US backed out of this deal and did not lower its tariffs. Experts assess that this might have escalated the stalemate between these two countries.
On Friday, White House economic advisor, Larry Kudlow, shared some positive sentiments. He said that the two countries were close to reaching a deal. What followed this was an unexpected event on Saturday. The Chinese Vice Premier, Liu He, and Treasury Secretary Steven Mnuchin, as well as trade representative Robert Lighthizer, held talks.
The Chinese Commerce Ministry termed the talks constructive and that the leaders agreed to stay in close contact. It is not certain whether this will yield much, but it is a step in the right direction. But Trump’s remarks on Tuesday spike up another debate and period of uncertainty again.
The Tariff War
As it stands, the US imposes tariffs on Chinese goods valued at up to $500 Billion. The Chinese, in response to this, also impose tariffs on US goods totaling $100 Billion. This imposition of tariffs escalated the Trade War to a point it seemed things would not go back to normal.
The sentiment on that evolves daily and reached very high optimism recently. But with Trump now stirring up the markets with his remarks, what happens next is a mystery. Experts are keeping tabs on how the Chinese government will respond to these threats issued by the US president.
