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Analysts at ANZ note that global trade tensions remain elevated and if the US’s Section 232 investigations against autos & parts and tariff threats against China come to fruition, import duties could rise to USD890bn worth of US imports by year’s end.

Key Quotes

“We would expect retaliatory measures, which would have implications for global trade and investment as well as inflation.”

“Global central banks will be cautious in this environment. At this stage, trade frictions are unlikely to derail the Fed from gradual normalisation. China has begun to ease policy, which may frustrate the US administration as financial markets react, particularly the CNY. The ECB is concerned about heightened protectionist measures.”