Global Macro Service > Research Briefings > China

New tariff plans unlikely to bring US back to the table

After three weeks of unusual silence, China announced on Friday it will impose retaliatory tariffs on $60bn worth of imports from the US if the Trump administration places more tariffs on Chinese imports. Meanwhile, the Trump team made disparaging remarks about China’s stock market and currency weakness. In principle there is still room for negotiation, and we cannot rule out a de-escalation. However, in practice the Trump administration is unlikely to come to an agreement with China about de-escalating the conflict. Meanwhile, the case for China willing to make enough concessions that the US government backs down is not convincing. Thus, the risk of trade tensions ratcheting up further is high.

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