Any progress to calm down the situation around the tariffs between two economic giants, concretely between the U.S. and China, has failed. Beijing will impose additional tariffs of 25% on 106 American products from 14 separate categories, including soybeans, cars and chemical products. China has said they will set these tariffs after the U.S. will apply its own tariffs.
The Wall Street’s reaction was very impulsive. Three major indexes staged a comeback to close around 1 percent higher on Wednesday. Indices managed to rise on Thursday, but they wiped out some of their profits on Friday, when the U.S. President Donald Trump ordered a review of new measures on 100 billion USD of additional Chinese goods.
This means the trade war is on. China will have to get creative to keep up the tit-for-tat rhetoric. There aren’t enough American goods imports to target; Of course, China could still take other measures — like curbing package tours or student transfers to the U.S., or steps against American companies’ operations in China, according to Bloomberg.com
China has responded to President Trump’s calls for an additional 100 billion USD in tariffs, saying that it would counter U.S. protectionism “to the end, and at any cost” “The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people,” the Commerce Ministry said in a statement on its website on Friday “We don’t want a trade war, but we are not afraid of one,” according to zerohedge.com
While U.S. stock-index futures fell after Trump’s move, investor reaction in equity markets across Asia wasn’t as big. Japan’s Topix index and South Korea’s Kospi gauge both slipped 0.3 percent, while Hong Kong’s Hang Seng Index rose 1.1 percent after a holiday Thursday. China’s stock and currency markets are shut until Monday due to its annual tomb-sweeping holidays.