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Trumps Proposes 25% Tariffs on $200 Billion on Chinese Imports Instead of 10%, Yuan under Pressure

Marios Athinodorou
Updated
Tariffs could escalate the trade war between the two biggest economies in the world although the tariffs will not be imposed until after a period of public comment.

According to Reuters, a trustful source that is familiar with President Trump plans, the US will probably announce a proposition for higher tariffs on Chinese imports.

There was no immediate reaction from the Chinese administration after Trump’s new proposal but last month China accused the US of bullying and warned that they will answer back.

Tariffs could escalate the trade war between the two biggest economies in the world although the tariffs will not be imposed until after a period of public comment. Obviously, investors concern that a trade war escalation between the two countries can hit global growth.

Some of the goods that are affected by the tariffs are lighting products, Chinese Tilapia fish, printed circuit boards and more.

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The dollar trades at 6.8140 versus the Yuan, up 0.13% after the reports.

Thu Yuan falls for the last 4 months in a row versus the US dollar and China’s central bank put the currency at the weakest level for 3 months. In addition, a survey showed that China’s manufacturing growth in July is the slowest for 8-month as export orders dropped. On the other hand, US steady growth will probably keep the FED on the same pace for another 2 hikes this year.

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On Tuesday, the US Consumer spending data was a positive and steady increase in June while wage growth staying restrained.

The core PCE index, almost hit the Fed’s two-percent inflation target while it raised 1.9% from a year earlier.

Tom Porcelli, chief U.S. economist at RBC Capital Markets. Said: “Though the tariff tantrum ramped up a bit since the last FOMC confab, the core of the Fed is thus far unconvinced that this warrants any material shift in the outlook, our core view remains that the Fed is poised to raise the fund’s rate by an additional 50 basis points this year and another 100 basis points in 2019.”

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

This article was originally posted on FX Empire

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