Following the earlier threat from the Chinese embassy, the first retaliatory trade actions from China are emerging and US and Japanese equity markets are in freefall…
Following the US imposition of 25% duties on China produce worth at least $50 billion including items in aerospace, information and communication technology and machinery, China has announced plans of reciprocal tariffs on $3 billion of U.S. imports.
China plans to add 15% tariffs on U.S. steel pipes, fruit, wine and other products, the Ministry of Commerce says in a statement, and also plans to add 25% tariffs on pork and recycled aluminum.
In the statement, China urged the U.S. to resolve the trade dispute via dialogue.
The reactions are ugly.
USDJPY is in freefall, plunging below 105.00 to its lowest since before Trump’s election…
Nikkei is set to open down over 3.5% and Dow futures are down another 200 points from the close…
As Bloomberg’s Enda Curran notes, China’s response was to be expected but it’s clearly only an opening play. Note the list of tariffs doesn’t include politically sensitive imports like soybeans. It’s a warning shot from Beijing.
All eyes will now be on the PBOC’s Yuan fixing, as offshore yuan has been tumbling…
It would be a big shock if China decides to devalue suddenly as a trade weapon.
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