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According to Elliot Clarke, Research Analyst at Westpac, global trade frictions continue to rumble on and the effect on confidence has been most obvious in foreign exchange markets with, for example, the Australian dollar trading down through the USD0.74 figure this week.

Key Quotes

“The state of play between the US and China is as follows. The US will impose tariffs on $34bn of specified imports from China come 6 July, and an additional $16bn of trade once the products are confirmed.”

“China will respond with tariffs on $34bn of US imports, again from 6 July, and a further $16bn of imports if the US proceeds with the tariffs still under negotiation. What created the market shock was arguably President Trump’s subsequent request to the United States Trade Representative to find a further $200bn of Chinese imports to the US to levy tariffs on if China goes ahead with its stated response, as well as an additional $200bn if they go further.”

“It is however important to remember that the strategic initiatives underway in Asia, Belt and Road in China as an example, still offer enduring hope of greater and fairer trade for the world.”