US-China trade war escalating? – Danske Bank

Sandeep Kanihama FXStreet Contributor

Last night, the Trump administration announced a new 10% tariff on USD200bn worth of Chinese products, notes the research team at Danske Bank.

Key Quotes

“A 10% tariff is less than previously feared, but at the same time, President Trump threatened to increase the tariff to 25% in 2019 unless a deal is reached to ease trade tensions.”

“The total value of imported goods from China covered by Trump's tariffs is now USD250bn or roughly 50% of total US imports from China.”

“China has promised to retaliate to any US measures against China one-to-one and with the new tariffs from the US side, it is difficult not to see the trade war escalate further - also in light of the US mid-term elections.”

“In our view, a deal seems unlikely before well into 2019. The risk is that it drags on. At least, China seems to be preparing itself for a long-lasting trade war by (among other things) easing economic policy.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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