Archives of “Donald Trump 2016 presidential campaign” tag

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Trump announces fresh tariffs on Chinese products, ramping up rates by 5%

  
Analysis, Economy
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Trump makes the announcement via Twitter

On October 1, Chinia is going to be hit by fresh tariffs.
Here’s the announcement, which was clearly timed to hit moments after the FX close:
For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more. Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer. As President, I can no longer allow this to happen! In the spirit of achieving Fair Trade, we must Balance this very unfair Trading Relationship. China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!). Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30% Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. Thank you for your attention to this matter!
One thing that’s a bit unclear is the Dec 15 tariffs. I’m guessing those are still exempted until then.
All told, this isn’t that bad. It could have been worse. He’s ramping up tariffs by 5%. It’s not some kind of apocalyptic announcement but it certainly continues the trend of escalation.
trade war

Trump on Iran says he is going to sit back and wait

  
Analysis, Politics
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Trump on Iran

  • Trump says he is going to sit back and wait, we’ll see what happens
  • He says it’s getting harder for him to make a deal with Iran, says it could go either way very easily
Obviously they’re not in a rush to war but that doesn’t mean they’re not putting some pieces in place. You don’t pre-announce any attack.
Separately:
  • Working on trade deals with Chinese President Xi

US-China trade negotiations at ‘standstill’ as US weighs Huawei

  
  Analysis
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Headlines crossing

Progress has stalled as Trump’s administration tries to figure out how to meet the agreement to allow some US firms to sell products to Huawei.
This thing sounds like it’s going to fall apart before it even gets going. Stocks finished on the lows.

Trump relents on tariffs, Huawei as US-China trade talks set for a revival

  
  Analysis
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What to look out for when markets open next week?

Trump

Trump and Xi once again managed to use their affinity to help strike a compromise in getting trade talks back under way earlier today.

Of note, Trump said that the US will not be levying new tariffs against China while also allowing for Huawei to purchase equipment from US companies – saying that he and Xi have agred to leave the “complicated” Huawei issue until the end of what appears to be an open-ended trade truce between the two countries.

Although Trump relented on his stance, he didn’t give any firm commitment on whether or not Huawei will be pulled from the entity list and says that the Commerce Department will meet in the coming days to review what products can be sold to Huawei.
I reckon the very notion of trade talks being revived is likely to give markets a bit of a relief on Monday even though much of this has already been anticipated. The key now will be to measure whether or not this optimism can last the course as negotiations are set to continue in the coming weeks/months.
Besides that, just be on the look out for any official statement release by both the US and Chinese camps when markets open next week. So far, China has said that they hope that Trump will deliver on the Huawei issue but didn’t really elaborate on any details pertaining to what other details both sides will be discussing in future negotiations.
As for any official statements, the interpretation of the language will be key. There’s no doubt China will be the more cautious and less upbeat of the two in building up market optimism after the recent setback in trade talks in May but we’ll see.
For now, I reckon the ‘back on track’ sentiment should lend risk assets a tailwind in the opening sessions next week with the moves likely to be more evident among equities and gold. As for FX, a risk-on gap at the open is very much in the offing given all the anticipation last week and the dollar may also see some gains as traders will surely now further question odds of a 50 bps rate cut by the Fed next month.

But it won’t be too long before traders and investors start asking themselves whether or not the concessions made here can lead towards a deal in the bigger picture.

In my view, the more structural issues remain a difficult gap to bridge for both countries unless they’re willing to move their red lines. We’ll see if that changes but I highly doubt a trade deal is imminent despite talks being revived. As such, it’ll only be a matter of time before markets – and any optimism from today – have to deal with that reality as well.
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