U.S. President Donald Trump is moving forward with imposing a 10% tariff on $200 billion worth of Chinese goods that includes a step-up increase of 25% by the end of the year. The tariffs come as both economic superpowers are said to be in the midst of scheduled trade talks to ease trade tensions.
The announcement came after the close of Monday’s trading session, which saw the Dow Jones Industrial Average fall by close to 100 points and the Nasdaq Composite losing 1.43% as trade wars 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 new round of tariffs on 10% of goods signals that the U.S. won’t relent on the application of pressure to force China’s hand in making a deal when actual negotiations materialize. Purportedly, the goals of the lower 10% figure is apparently two-fold–to swing voters towards Republicans when mid-term elections begin and to lessen the blow for shoppers as holiday shopping is set to start this fall.
The list of goods affected by the new round of 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. Despite this, the latest actions could no doubt ramp up trade tensions, which could reflect negatively at the opening bell of Tuesday’s trading session.
“We’ve given them chance after chance after chance. At this point, they have remained obdurate,” said a senior administration official, who declined to be named per a report by CNBC.
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