26 March 2018
Bassanese Bites: Trade tantrum – Week beginning: 26 March 2018
It was a “risk-off” week for global markets, with the major tremor stemming from US President Trump’s (yes him again!) request that a list of tariffs be drawn up to impose on around $US50 billion worth of Chinese imports. Although this still remains merely a threat, stocks duly dropped and China responded that it was ready to retaliate in kind. Will a trade war break out? My sense is that Trump is merely again trying to talk tough – to possibly improve his negotiating position in trade talks – but (more likely) simply to appease his rust-belt political base. His steel tariffs, for example, have already been considerably watered down, with exemptions for several major economies like Canada and Mexico – and even Australia! He’s also getting ready to talk to North Korea after once tweeting diplomacy was not worth the effort.
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