• US-China trade tensions: Tariffs “Tit for Tat” threaten global growth
• The importance of intellectual property in the US-China trade-off
• White House announced it was aiming to cut its deficit with China
• Impact of any trade war will be felt on several fronts, including equity, currencies and commodities
• US-China spat could affect fast-growing trade in Asia, but it's also an opportunity for some economies
• Neither the US or China want a trade war

US market returned from the 4th of July holiday with few if any convictions ahead of President Trump’s first tariffs that are scheduled to hit USD34bn of Chinese imports later today and Beijing plans to respond with levies on an equal amount of goods swiftly.

The Trump administrations trade war is finally upon us, and by all accounts, we are headed for an unparalleled trade conflict between the world’s largest economies. If this moves off the tit for tat battleground into a full out trade war, it will not only threaten market stability but could compromise relations between Washington and Beijing at a time when co-operation dealing with North Korea should take some precedence.

The US also sparring with other trading partners. Yes. Trump is battling in just about every direction. He has slapped tariffs on imported steel and aluminium — action that has drawn retaliatory tariffs from US allies like Canada, Mexico and the European Union. The president is also threatening to impose tariffs on imported vehicles and auto parts on the grounds that they pose a threat to America’s national security.

And he is pressuring Canada and Mexico to agree to rewrite the North American Free Trade Agreement to shift more auto production to the US and encourage companies to move investment from Mexico to the US.

By brawling with America’s friends, critics say, Trump has squandered an opportunity to build a united front against China. After all, Europe, Japan and other rich countries have the same complaints about Chinese trade practices that America does.

The worsening trade disputes are inviting big trouble in the second half of 2018, particularly since the White House appears bent on expanding the fight to an everincreasing number of fronts. First it was China. Then Europe, Canada and Mexico. South Korea and India have also been roped in.

US-China trade tensions: Tariffs “Tit for Tat” threaten global growth

China and the US are on the brink of a full-scale trade war as both sides escalated their threats of imposing new trade tariffs. On June 18, President Donald Trump ordered his administration officials to draft plans for tariffs on a further USD200bn in Chinese imports if Beijing follows through on its threat to retaliate against US duties on imports announced last week.

The tariffs announced, which are due to take effect in early July (July 6), would affect a combined USD100bn worth of trade between the world's two largest economies. China and the US have both already imposed tariffs on steel, aluminium and some agricultural goods.

Source: BIMB Securities Research - 6 Jul 2018