Here we go. China slapped tariffs on a range of US products and announced a probe into Google for alleged antitrust violations, moments after President Donald Trump imposed a 10% levy on goods from the Asian nation.
The retaliation reignited a trade war between the world’s largest economies, dashing hopes that Beijing would reach a deal to avoid the tariffs. Trump hours earlier had granted Canada and Mexico a last-minute reprieve from a 25% tariff following talks. He’d also signaled a desire to speak with President Xi Jinping before the levies took effect.
Among the measures, Beijing hit US coal and liquefied natural gas exports with a 15% levy, and targeted its oil and agricultural equipment with a 10% fee. Authorities also put Calvin Klein owner PVH and US gene sequencing company Illumina onto a so-called blacklist of entities, and imposed new export control on tungsten-related materials. It’s getting messy indeed.
US stock futures dropped and oil tumbled after China’s retaliation, though S&P 500 futures and contracts on the Nasdaq 100 clawed back some of their sharp declines after the tit-for-tat levies were seen as relatively targeted. The dollar extended gains against all its G-10 peers, with currencies sensitive to China’s growth such as the Australian and New Zealand dollars tumbling. Chinese stocks listed in Hong Kong were still up 3.5% on the day. China’s domestic markets will re-open after holidays on Wednesday.