Investment Note 19th June 2018

Trump announces a further $200 billion in trade war


President Trump last night announced a further escalation in the ongoing trade war with China. The President directed a further $200 billion of Chinese imported goods to be earmarked for 10% import levy unless the Chinese government gave up its unfair trading practices in relation to the acquisition of US intellectual property. Markets believe that, ultimately, in this war of attrition the US has the upper hand due to its exhaustive list of Chinese imports totalling $505 billion last year. This is compared to only $130 billion in Chinese imports of US goods which makes this a much more painful exercise for China than the US. Markets have predictably taken the news badly as any escalation in a trade war threatens to derail the fragile global recovery. 

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