Trump Looks To Slap China With $50 Billion In Tariffs On Imported Products


On Thursday, President Trump moved to impose stiff tariffs on Chinese goods that could cost China up to $50 billion. The tariffs are a result of unfair trade practices used by the Chinese to acquire US trade secrets in order to do business in China.

“The end objective of this is to get China to modify its unfair trading practices,” said Everett Eissenstat, deputy assistant to the president for international economic affairs.

President Trump signed the memorandum today which allows his trade representative to produce a list of Chinese products that the tariffs will affect. This list will be released in the next 15 days and the tariffs will likely be imposed shortly after.

“The imposition of sweeping tariffs would trigger a chain reaction of negative consequences for the U.S. economy, provoking retaliation; stifling U.S. agriculture, goods and services exports; and raising costs for businesses and consumers,” said the letter, signed by leaders of the U.S. Chamber of Commerce, the National Retail Federation and other groups.

Trade wars are not notoriously good for markets and with this news hitting the wire we have seen US markets dive over 2% as volatility picks up.

As you can see in 30-minute chart above, the $SPY gapped down and sold off at the open before stabilizing at the $266 price level. Shares have been under pressure for that past couple of weeks and as of the time of this writing are down 6.7% from highs set back in January.

These tariffs will likely result in some kind of retaliation from China and could ultimately result in a full blown trade war which could raise tensions even further with China. Make sure to manage your positions appropriately as we will like see continued volatility in the near future.