|Data for week commencing 6 May 2019|
The trade war has begun! Tariffs have been enacted, meaning that the 10% slugs on Chinese exports to the USA will now be pushed up to 25% but goods already on their way to the USA will be given an exemption. Despite this, the Dow Jones ended up 114 points. Why? Well, despite the failure of the talks to get to a satisfactory end point, as The Guardian reported: “US Secretary Mnuchin said the talks were constructive and trade negotiator Liu said that they went fairly well. The mixed signals from President Trump earlier had put pressure on energy prices and global stock markets, but positive comments from both sides sparked a rebound near close of trading for the week.” (Alfonso Esparza, analyst at trading firm OANDA)
But wait there’s more. China has been given three to four weeks to make an agreement or more tariffs will be coming. If Donald Trump was a typical politician, you’d bet or invest on the prospect that it will happen on this time frame. But he’s not. And he’s dealing with Chinese counterparts who culturally can’t deal with public embarrassment well and aren’t happy to be pushed around.