Reuters unveiled details of the annual report from the US Trade Representative (USTR) during early Thursday in Asia. The news suggests Washington’s readiness to reduce foreign trade barriers while criticizing China for overburdening the markets.
“The U.S. government on Wednesday vowed to continue battling what it sees as significant trade barriers that are harming American companies and farmers, and singled out China as the “world’s leading offender” in creating overcapacities in several sectors,” said the news.
Although the US readiness to engage with the foreign government to resolve the issue could be a diplomatic approach, welcome as well, USTR’s tough stand on China weighs on the market sentiment. The report suggests the USTR’s vow to “work to address Chinese subsidies that have created excess capacities in the steel, aluminum and solar sectors, and could soon affect other industries.”
FX implications
The news gives another point to the China versus the West story and strength the risk-off mood. However, traders are currently more interested in inflation and the coronavirus (COVID-19) news and hence a little immediate reaction could be witnessed from AUD/USD, despite staying dull.
Read: AUD/USD: Sluggish around 0.7600, unimpressed by Biden’s infrastructure plan
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