US: Trade deficit reduction begins – Deutsche Bank

President Trump has authorised US Trade Representative Robert Lighthizer to impose 25% tariffs on as much as $60bn in annual imports from China, points out the research team at Deutsche Bank.

Key Quotes

“It’s expected that 10 key sectors will be targeted which were identified under President Xi Jinping’s ‘Made in China 2025’ plan. A detailed list is expected in the coming days. In addition to that, the President has also ordered the US Treasury to start plans for imposing restrictions on Chinese investments in certain sectors. Adding fuel to the fire, Trump said that “this is the first of many”. China’s ambassador to the US said that while “we don’t want a trade war” we “are not afraid of it” and “we will certainly fight back and retaliate”.”

“This morning, China retaliated with the Commerce Ministry announcing plans for reciprocal tariffs on $3bn of imports from the US, including a 25% tariff on US pork and recycled aluminium as well as 15% tariffs on US steel pipes, fruit and wine. The general feeling is that China’s response has been relatively contained and measured.”