Update (8:30 pm ET): Barely two hours after Trump offered yet another trade war “tit” to China’s “tat”, the Chinese leadership released a statement foreshadowing its next inevitable retaliation in the escalating trade war between the world’s two largest economies.
In a report published by the state-run Xinhua News Agency, Beijing vowed to defend China’s national interest against US trade actions and protectionism, and said that Trump’s latest threats to introduce an additional $100bn in tariffs on imports from China “seriously violates the rules of international trade.”
In short, we’re sure a deal to quash the trade beef once and for all is right around the corner…
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Yesterday, just as the market soared by over 700 points from session lows because some 17-year-old hedge fund manager somewhere created the idiotic narrative that both China and the US publishing their lists of $50 billion in tariffs, that this somehow indicated easing trade tensions, we said the opposite, namely that “A green close is just what Trump needs to launch another round of tariffs.”
A green close is just what Trump needs to launch another round of tariffs
— zerohedge (@zerohedge) April 4, 2018
Just over 24 hours later, we were proven correct because moments ago – emboldened by the market surge on Wednesday and Thursday – Trump just ordered the US Trade Representative to consider doubling the amount of Chinese import tariffs to $100 billion – or from $50 billion to $150 billion.
Putting this number in context, a 25% tariff increase on $150 billion in total goods would block close to 30% of China’s $505 billion in exports, a number which had been originally proposed several weeks ago before getting watered down to the $50bn range.
“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.”