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Analysts at Deutsche Bank point out that just after the bell yesterday, it was back to the trade war as US President Trump formally announced the implementation of the next round of punitive tariffs on imports from China.

Key Quotes

“The levies will take effect on 24 September and will cover $200bn of goods, including some consumer goods. The initial tariff rate will be 10%, rising to 25% on 1 Jan 2019.  This is somewhat more severe than the market had anticipated, given recent rumours for an outright rate of 10%, and the tone of the statement was somewhat hawkish, including an assertion that “if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267bn of additional imports.”

“We haven’t seen any retaliation from China overnight however Vice Premier Liu He is due to hold a meeting in Beijing at any moment to discuss a possible response.  Reuters is also unsurprisingly reporting that China will not send a trade delegation to Washington now.”

“So worth keeping an eye on all that this morning and a possible China response.”

 

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