Stocks Tumble On China Tariff Headlines

Well that spoiled the party… however briefly.

Bloomberg reports that existing tariffs on billions of dollars of Chinese goods coming into the U.S. are likely to stay in place until after the American presidential election, and any move to reduce them will hinge on Beijing’s compliance with the terms of a phase-one trade accord, people familiar with the matter said.

The two sides have an understanding that no sooner than 10 months after the signing of the agreement at the White House Wednesday, the U.S. will review progress and potentially trim tariffs now in place on $360 billion of imports from China, the people said, declining to be identified because the matter is private.

And the reaction was instant… Dow dumped back below 29k…

And yuan weakened significantly…

Source: Bloomberg

Hogs and cotton futures prices also slipped on the headline.

As a reminder, only the then-imminent September tariffs were actually removed (before they hit) in the phase one deal, so this should not be a total shock. However, it appears the assumption was that the rest of the tariffs would be lifted sooner rather than later.

Tariff Man strikes again!