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Trade War?

April 4, 2018

This week we had round 2 of announcements of actual or “planned” tariffs between the US and China. (and it’s only Wednesday)

As threatened/promised recently, the Trump administration released a list of 1300 items or roughly $50B worth of imports that would face 25% tariffs pending a comment and approval process. The justification is infringement of copyrights, patents and other IP in prior years. This list is a broad variety of manufactured items, electronics, and chemicals.

China responded with a list of 106 items also worth about $50B of imports there and also to face 25% tarriffs, if the US ones go through. It is primarily agricultural items, animal feed, tobacco, whiskey, but also chemicals and automobiles. The last item on the list, probably symbolic of what round 3 will go to for China, is: aircraft in the size range of the Boeing 737.

Like most things with Trump, we have to discount the huffing and puffing somewhat. These are not a done deal at this point. Further escalation, though, would really make waves on the business side, and could cause the return of price inflation in everyday products.

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