Expect a near-term announcement that the tariffs will move forward - Nomura

Analysts at Nomura explained that the comment period for the next tranche of tariffs on Chinese imports, totaling roughly $200bn at a 25% rate, closed on 6 September without a statement from USTR or President Trump on implementation. 

Key Quotes:

"However, we continue to expect a near-term announcement that the tariffs will move forward, possibly as early as next week, likely in installments. On Friday afternoon, President Trump noted that, in addition to the $200bn that just finished review, there is another “$267bn ready to go on short notice if I want,” indicating a sustained willingness to escalate the US-China trade dispute further."

"Elsewhere this week, USTR Lighthizer and Canadian Minister of Foreign Affairs Freeland resumed NAFTA negotiations as the US and Canada seek to reach an agreement by end-September allowing the two countries plus Mexico to sign an updated NAFTA agreement by end-November."

"We believe a trilateral deal remains the most likely outcome for the NAFTA renegotiation process."

"With just under two months to go before the 2018 midterm elections, we published our midterm election preview, outlining why we believe Democrats will gain a majority in the House while the Senate remains in Republican hands. Overall, we do not expect the results of the midterm elections to meaningfully impact the US economic outlook."

"We believe Congress will be able to push through must-pass spending legislation (e.g., raising the FY20 spending caps and dealing with the debt limit), but do not expect much else from the legislative agenda (see US 2018 Midterm Election Preview, 5 September 2018)."