Trump threatens increased tariffs on Chinese Goods
In the last month it had looked as though trade tensions between China and the US had been easing with rumours circulating that the trade war could even be over by the end of May. However, Trump has made threats to the Chinese announcing his intentions on Twitter to more than double current tariffs on $250bn worth of Chinese goods and services tomorrow.
Trump Tweeted the following:
“The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!”
This is ahead of Chinese representatives heading to Washington for talks in an attempt to end this trade war.
This is far from good news for the global economy, and if the US President does go through with his threat it could have a huge impact on the markets. China would likely retaliate with further increased tariffs on the US. The International Monetary Fund (IMF) have caused concern by stating this an escalation in the trade war would cause the global economy to weaken.
CPI Data – Tomorrow
Consumer Price Index (CPI) data is released tomorrow, and figures could influence monetary policy from the Federal Reserve Bank moving forward. CPI data is a key measure of inflation, and considering the inconsistent interest rate forecast in the US, this release has all the more clout.
It is anticipated that Theresa May will put forward her first formal offer to Jeremy Corbyn. The Tories are expected to put forward a temporary customs deal. It is claimed this will give Britain the benefits of being in the customs union while allowing some trade deals to be negotiated but not set in stone. The arrangement would stay in place until the next general election. At that point Labour could campaign for permanent access to the customs union.
The pound will remain fragile against the US dollar until we have firm progress on Brexit.
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