China appears to have successfully called President Trump’s bluff over his “Liberation Day” tariffs, but negotiations are ongoing and there remains potential for further upset. Not content to simply hope for a favourable outcome from such negotiations the State Council announced a raft of monetary policy measures intended to stabilise and calm the markets.
Tariffs
The big news this month is, of course, the US-China trade discussions in Switzerland that ran from 9-12 May. Having rapidly ramped up tariffs on China on his so called “Liberation Day”, eventually reaching a lofty 145% after China retaliated with their own tariffs (125%), Trump’s team left Switzerland with US tariffs on China temporarily lowered to 30% and Chinese tariffs on the USA reciprocally lowered to 10%. Discussions are ongoing, and so these rates will doubtless change, but it seems the damage has already been done and forecasts suggest that 70% of Chinese exports to the US be reduced, and empty (or emptier) shelves wi...
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