Escalating trade tensions will once again be a central theme to driving sentiment and trading this week, with President Trump widely expected to levy tariffs on a further $200 billion worth of Chinese imports, potentially as soon as today. The elevated trade concerns sent Asian markets lower overnight and are weighing on European bourses as the opening bell approaches.
The decision to start to apply tariffs, which are rumoured to be 10%, rather than the initially higher level of 25%, is expected despite Treasury Secretary Steve Mnuchin’s attempts to restart talks with the Chinese to try to resolve trade difference between the two powers; once again highlighting the hap hazard approach of the White House in its America First protectionist policies.
Trade concerns have been simmering for months and it is growing increasingly clear that neither side is prepared to back down, which is fanning fears that the world’s two biggest economies are heading towards a trade war. For now, developed markets are taking heart from the scant signs the trade spat is able to shake the global economy.