After the markets closed yesterday, the Trump administration announced it would be moving forward with imposing a 10% tariff on $200 billion worth of Chinese goods that includes a step-up increase to 25% by the end of the year. The administration moved forward with the tariffs despite both economic superpowers in the midst of scheduled trade talks to ease tariff tensions.
The announcement of yesterday’s tariffs came just as the Dow Jones Industrial Average fell almost 100 points and the Nasdaq Composite lost 1.43% as trade war fears crept back into the U.S. capital markets despite effectively parrying their effects in August and for most of September.
Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country – and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be “Tariffed!”
— Donald J. Trump (@realDonaldTrump) September 17, 2018
The list of goods affected by the new round of U.S. tariffs was apparently modified by the White House, which removed about 300 goods from an initial list that included smart watches, certain chemicals, bicycle helmets, high chairs, and other goods. Both the U.S. and China are said to have scheduled talks to address the latest trade issues later this month, but it is uncertain whether these new round of tariffs have put those purported talks on hold or abandoned altogether.
“The principal objective of the tariffs is probably not to bring Beijing to the bargaining table,” Arthur Kroeber, a senior analyst at research firm Gavekal said in a note. “Rather, it is to force US multinational companies to pull back their investments in China, so that the interdependence of the two rival economies is reduced.”
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