Escalating trade tensions precipitated last week when U.S. President Donald Trump announced the U.S. would impose a 25 percent tariff on over $50 billion worth of Chinese goods. The Chinese Commerce Ministry responded with a 25 percent tariff on $34 billion worth of U.S. goods.
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The Dow opened on the down side on Tuesday by 400 points in the latest trade threat with the Trump administration proposing an additional round of tariffs on over $200 billion worth of Chinese goods. It’s an ongoing war with market implications for both sides and no winners, according to Jeremy Klein, chief market strategist at FBN Securities.
“While I suppose no one wins a trade war, the U.S. is currently ‘losing less’ in its current dispute with China if one uses the respective stock markets as a guide. While the S&P 500 largely stands in place and resides well above its correction bottom from earlier in the year, the Shanghai Composite has tumbled to a twenty-three month low,” said Klein.
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