WILL THE UNITED STATES IMPOSE NEW TARIFFS ON CHINA?
US President Trump is considering imposing a new 10% tariff on 300 billion USD worth of Chinese imports by the 1st of September. The main reason cited for the move is the slow pace of progress made (if any) in the US-China negotiations. It should be noted that the new round of negotiations in Shanghai has ended yesterday without any signs of progress on the horizon. The announcement of the US President’s intentions sent stock markets and bond yields tumbling, while at the same time strengthened the case for the Fed to proceed with more rate cuts. It would be indicative of the situation that the US President also stated that he wasn’t concerned about the market’s reaction, yet at the same time left a window open for negotiations to bear fruit. We could see the situation escalate further, as the US President seems to be determined on the issue and as China may issue a harsh response to the threat.
Other economic highlights, today and early tomorrow
Today during the European session, we get UK’s construction PMI for July as well as Eurozone’s PPI and retail sales growth rates, both for June. Besides the US employment report for July, in today’s American session, we get the US Trade balance for June, the US factory order for June, the Michigan consumer sentiment final reading for July and the baker Hughes oil rig count. From Canada, we get the trade balance for June. During Monday’s Asian session, we get Japan’s services PMI for July.
August 2, 2019