The Sino-US trade talks that have dominated this week’s headlines reached a climax last night when US President Donald Trump raised tariffs on Chinese imports to 25 per cent. Trump’s arguably boldest move yet has rattled the markets and cast a shadow over the global economy.
China immediately released a statement saying it “deeply regrets” the move and will have to take “necessary counter-measures”, without providing further details.
The US-Chinese trade war has weighed on the global economy over the past year and created uncertainty for businesses and consumers. The new tariffs will affect more than 5,700 product categories ranging from cooked vegetables to Christmas lights and babies’ highchairs, the effect of which is likely to be passed on to the consumer.
However, the negative impact could be much greater. Moody’s Analytics said in a report this week that a trade conflagration between the world’s largest economies risked pushing the US into recession by the end of next year when US voters will be going to the polls.
In Europe, German export data showed an increase of 1.5 per cent in March compared to the same month last year. This strong print showing growth counterbalances the view that Germany is moving towards recession.
In the UK, growth figures for the economy in the first three months of the year are due this morning. Economists are predicting quarterly growth to pick up from the end of last year to 0.4–0.5 per cent. Some of this can be attributed to stockpiling as companies took precautions to offset the uncertainty over Brexit.
This release comes alongside monthly manufacturing production data, followed by US Consumer Price Index (CPI) data in the afternoon.
Global markets anxious ahead of crucial trade talks
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