US Escalates Trade Dispute With China
The trade dispute between the US and China is gaining momentum. Donald Trump said that he will impose tariffs on Chinese imports of $50 billion. Tariffs of 25% will be applied to the Chinese imports containing advanced technologies, including those related to Beijing’s “Made in 2025” development program.
The final tariff list will be made public by June 15, with the new import taxes taking effect shortly thereafter. The White House administration also announced that it would impose new restrictions on Chinese investment into the United States and limit US exports of high-tech goods to China.
The threats come just over a week after trade tensions between the world’s two largest economies has eased. The US Commerce Secretary Wilbur Ross is due to arrive in Beijing on Saturday for talks aimed at cooling trade tensions. According to analysts, the decision to move forward with the tariffs could stop planned talks. The Chinese government said the announcement "is obviously in violation of the consensus reached in Washington recently by both China and the United States."
Asian equities fell, as concerns about the repercussions of Italy’s political turmoil and the renewal of trade tensions between the US and China gripped financial markets. The Japanese yen extended gains, while Treasury yields seemed to stabilize after a plunge Tuesday. Japan's Nikkei fell 1.8%, Hong Kong's Hang Seng slid 1.3%, and China's Shanghai Composite was down 2%.