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Raoul Leering, head of international trade analysis at ING, points out that the US President Trump added yesterday accused China of trying to renegotiate and threatened to hike tariffs to 25% on the $US 200 bn package of imports from China that were subject to a hike of 10% last September.

Key Quotes

“Among other things China and the US still have to agree on an enforcement mechanism. The US wants to be able to punish China with renewal of tariffs if China does not live up to their side of the deal. China does, according to press statements, not accept a one sided mechanism in which it is not allowed to retaliate tariff hike by the US.”

“In our view Trumps tweets are a negotiation strategy.”

“Trump plays hard ball, but the renegotiation of NAFTA has shown that he is prepared to water down some of his toughest demands.”