Here we go, folks.
As if the backdrop needed to get any more fraught after Thursday’s bloodbath on Wall Street, these headlines suggest things could get uglier in a hurry :
More details from Bloomberg:
China said it doesn’t fear at trade war with the U.S. and announced plans for reciprocal tariffs on $3 billion of imports from the U.S. in the first response to President Donald Trump’s ordering of levies on Chinese metal exports.
China plans tariffs on imports of U.S. pork imports, recycled aluminum, steel pipes, fruit and wine, according to a Commerce Ministry statement on Friday. China will also pursue legal action against the U.S. at the World Trade Organization in response to the U.S. planned tariffs on steel and aluminum imports, the statement said, and called for dialog to resolve the dispute.
To be clear, the narrative on Thursday was that perhaps China would take a wait-and-see approach or that at the very least, their response would be “measured”. After all, Xi is Trump’s “friend” and they have a “great relationship” (that’s according to Trump).
Plus, they shared a big piece of chocolate cake once at Mar-a-Lago (right before Trump broke the news that he was bombing Syria). If you recall, that cake was about yea bigly…
Whether or not Xi’s response to Trump’s decision to slap China with $50 billion in new tariffs will be “measured” remains to be seen, but clearly they aren’t going to sit idly by or otherwise wait around too long to let Trump know what they think about Thursday’s announcement out of Washington.
“I doubt very much we’ve seen the end of this,”Sydney-based Su-Lin Ong, senior economist and head of FI strategy at Royal Bank of Canada said, adding that the market should probably be prepared for more in the way retaliation from Beijing. “The odds are this is not the end of it. That’s the worry.”