This week President Trump decided to increase the tariffs on Chinese exports to the United States. The decision was somewhat surprising, considering the two leaders agreed on a temporary truce at their meeting in Japan last month. The negotiations for a trade deal between the two countries just began and were viewed as constructive by both sides.
It appears that right now the most important Chinese politicians involved in the trade negotiations are all scattered for conferences and retreats around the world, preventing them from coming up with a unified response to the tariffs. However, those among them that did manage to speak out condemned the new tariffs, stating that this kind of extra pressure is bad for trust and isn’t going to help.
Investors are unsure whether China will return back to the negotiation table, considering all of this. The Chinese have always shown a readiness to talk, yet every time progress was made, Trump managed to do something to disrespect them. Some analysts fear that China may just have had enough.
Regarding retaliation, it’s true that China doesn’t import as much from the United States, so there simply is less to add tariffs to. However, they do own most of the world’s rare minerals that the United States imports, so China could cut the US off.
