As we noted yesterday the unseen gorilla in the room could be inflation--that is, it will surprise to the upside more than most economic gurus and market soothsayers expect. That would no doubt cause the Fed to hike rates even higher than many anticipate and Monday's decline could be the first of other signs to come. Hard hat time.
With Monday's drop the S&P 500 unofficially touched a 10% decline from its late January high. And with China rattling its economic sabers, saying it will respond proportionately to the U.S. imposed trade tariffs, investor jitters might be with us for awhile.
Bloomberg reported: China will respond to any tariffs imposed by the U.S. against alleged violations of intellectual property rights with the same proportion, scale and intensity, said its U.S. ambassador Cui Tiankai.
Cui’s comments, in an interview with state-run CGTN English news channel Tuesday, are the first to indicate that China will retaliate on a scale that matches U.S. plans for additional duties on Chinese imports. The U.S. is readying duties on $50 billion of Chinese products as punishment for what Washington sees as widespread violations of intellectual property rights. U.S. Trade Representative Robert Lighthizer has until Friday to propose a list of Chinese products to be targeted to compensate for what he said was harm caused to the U.S. economy by China’s policies.
How much is bluster and how much is real remains to be seen, but Cui warned of a tit-for-tat development that could prove interesting. “If they do, we will certainly take counter measures of the same proportion and of the same scale, same intensity,” Cui said in the television interview. He said China has made good progress strengthening protection of intellectual property rights and is ready to look at cases where violations have occurred.
After announcing that tariffs on 128 kinds of imported goods from the U.S. would take effect Monday, China urged trade talks with the U.S. to prevent greater damage to relations. The reciprocal tariffs, a response to U.S. tariffs on metals announced in March on national security grounds, are imposed on goods valued at about $3 billion, a tiny fraction of its U.S. imports.
China holds a lot of U.S. Treasuries. So stay tuned. Now might be as good of time as any to expect the unexpected. As for money, that's what we like for now--cash.
With Monday's drop the S&P 500 unofficially touched a 10% decline from its late January high. And with China rattling its economic sabers, saying it will respond proportionately to the U.S. imposed trade tariffs, investor jitters might be with us for awhile.
Bloomberg reported: China will respond to any tariffs imposed by the U.S. against alleged violations of intellectual property rights with the same proportion, scale and intensity, said its U.S. ambassador Cui Tiankai.
Cui’s comments, in an interview with state-run CGTN English news channel Tuesday, are the first to indicate that China will retaliate on a scale that matches U.S. plans for additional duties on Chinese imports. The U.S. is readying duties on $50 billion of Chinese products as punishment for what Washington sees as widespread violations of intellectual property rights. U.S. Trade Representative Robert Lighthizer has until Friday to propose a list of Chinese products to be targeted to compensate for what he said was harm caused to the U.S. economy by China’s policies.
How much is bluster and how much is real remains to be seen, but Cui warned of a tit-for-tat development that could prove interesting. “If they do, we will certainly take counter measures of the same proportion and of the same scale, same intensity,” Cui said in the television interview. He said China has made good progress strengthening protection of intellectual property rights and is ready to look at cases where violations have occurred.
After announcing that tariffs on 128 kinds of imported goods from the U.S. would take effect Monday, China urged trade talks with the U.S. to prevent greater damage to relations. The reciprocal tariffs, a response to U.S. tariffs on metals announced in March on national security grounds, are imposed on goods valued at about $3 billion, a tiny fraction of its U.S. imports.
China holds a lot of U.S. Treasuries. So stay tuned. Now might be as good of time as any to expect the unexpected. As for money, that's what we like for now--cash.
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