May 29, 2020

Tariff fears: Will USA impose new tariffs on Chinese goods?

LQDFX news blog: Tariff fears: Will USA impose new tariffs on Chinese goods?

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Although NAFTA talks resumed, and progress was made towards the modernization of the trilateral agreement, tariff fears still weigh.

The deadline for the public consultation for Trump’s plan to impose tariffs expires at midnight. It is not clear whether the US administration is to escalate the trade dispute by imposing tariffs on $200 billion more in Chinese imports. If this happen, it would be the second phase of this trade war. The world’s two largest economies have already imposed tariffs to $50 billion of each other’s goods.

The two economic giants completed trade talks among mid-level officials last month, without any major breakthroughs, as widely expected.

The duties of up to 25% form part of Trump’s efforts to pressure Beijing to end harmful trade practices. However, unlike previous rounds of U.S. tariffs, consumer products could be directly hit by this batch.

Most businesses argued that the new tariffs will cause higher costs for everyday products, while the previous tariffs hit mainly industry. Only a small number of the business sector praised such measures or.

Trade concerns also weighed on sentiment after Trump threatened fresh tariffs on another $200 billion worth of Chinese imports.

Trade disputes affect investors’ sentiment and have been their big concern since the beginning of 2018.

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Forex Market once more ahead of tariff fears

The Dollar traded lower against its major traded rivals despite trade concerns, mainly because of the bounce in European currencies. The dollar index dropped 0.1%.

The Australian Dollar traded flat after Australia posted its best economic growth in 6 years on Tuesday.

The Sterling inched up 0.33% against a weak US dollar amid Brexit concerns. The pound edged up 0.25% against the single currency as well.

Oil prices traded higher due to a weaker dollar and signals about a strong US demand. Brent crude futures were up 22 cents a barrel, while U.S. crude futures rose 19 cents from their last close.

Gold prices rallied today, rising by 0.22%. Silver prices rose too, by 0.32%.  

Sources: Reuters, CNN money, BBC

PLEASE NOTE The information above is not investment advice.