Features

US-China trade tensions worsen

A new round of US trade tariffs on $16bn-worth of Chinese imports kicked in last week, and Beijing retaliated with levies on the same amount of American goods.

A new round of US trade tariffs on $16bn-worth of Chinese imports kicked in last week on goods including semi-conductors, chemicals and electric scooters. Beijing retaliated with levies on the same amount of American goods, including fuel and medical equipment. This is the second round of tit-for-tat measures and $50bn of imports on each side now face levies.

Trump insists he plans to impose taxes on over $500bn of Chinese goods unless Beijing agrees to major changes in its intellectual-property practices and industrial-subsidy programmes. China has denied Washington's allegations that it systematically forces the unfair transfer of US technology and insists it adheres to World Trade Organisation rules.

Beijing has plenty of fiscal and monetary tools to keep the economy afloat, says Arthur Kroeber of Gavekal Research. The country's property sector and consumer spending are holding up well. China "is well placed to outlast the US in an economic war of attrition".

The US Federal Reserve has flagged a trade war as a risk to the US economy, says Shawn Donnan on Bloomberg, "but one that's still over the horizon". For now, Jerome Powell, chairman of the Fed, expects stronger growth. What's more, Mexico and the US have agreed to refine the North American Free Trade Agreement. As Ben Levinsohn notes on Barron's: "We're never more than a tweet away from disaster on trade but for now, there's optimism."

Recommended

How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
A weakening US dollar is good news for markets – but will it continue?
Currencies

A weakening US dollar is good news for markets – but will it continue?

The US dollar – the most important currency in the world – is on the slide. And that's good news for the stockmarket rally. John Stepek looks at what …
3 Dec 2020
Donald Trump’s next moves
Donald Trump

Donald Trump’s next moves

The outgoing US president is deep in debt and he will need new sources of income now that he is out of a job. Don’t expect him to go quietly, says Sim…
28 Nov 2020
The charts that matter: precious metals and bitcoin swoon
Global Economy

The charts that matter: precious metals and bitcoin swoon

As gold and bitcoin both slide, John Stepek looks at what else has happened this week in the charts that matter the most to the global economy.
28 Nov 2020

Most Popular

This week’s rally in value stocks is just the beginning
Value investing

This week’s rally in value stocks is just the beginning

The arrival of a vaccine this week saw huge gains in the markets and investors switching out of big-tech growth stocks and into “value” stocks in more…
13 Nov 2020
Share tips of the week
Share tips

Share tips of the week

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
13 Nov 2020
Time for investors to be fearful, not greedy – and sell?
Investment strategy

Time for investors to be fearful, not greedy – and sell?

The Covid-19 crash proved a great investment opportunity. Does the vaccine mean it’s time to sell?
23 Nov 2020