The US’s dispute with China centres on what the US describes as “unfair” Chinese practices related to the transfer of technology and the use of foreign intellectual property.
President Trump has been threatening that any retaliation by China would be met with further tariff increases by the US. The tariffs implemented on Friday affect around 6% of US imports from China, but if the further tariff increases go ahead, they will affect more than 40% of US’s imports from China.
President Trump’s focus on bilateral trade deficits would have been better served by accepting China’s earlier offer in talks to increase imports from the US by $70bn. Оtherwise we may see stronger pressure on indices and stocks