TRADE WAR IS ESCALADING

Edito The US threat made last Sunday was carried out this morning: the United States raised tariffs from 10% to 25% on around 5,700 imported Chinese products worth $200bn. These additional tariffs come on top of the $50bn in Chinese high-tech products already taxed at 25% since last summer. The trade war is intensifying and the escalation of customs tariffs seems far from over. The Chinese authorities have already promised countermeasures, while the United States indicated last Sunday that it wanted to rapidly extend the 25% tariff rate to an additional $325bn in products imported from China. Market volatility is therefore likely to flare up again and these Chinese-US trade tensions are unlikely to give any boost to international trade, which is already slowing down markedly.