US-China in a war of attrition – Danske Bank

Danske Bank analysts point out that the China retaliated the US additional tariffs this week by increasing tariffs on US goods worth USD60bn and will most likely also halt purchases of US agricultural goods and take other measures but a formal announcement will probably not be made on this.

Key Quotes

“China hit back at US allegations of backtracking and instead accused the US negotiators of themselves reneging on trade talks on the matter of the amount of Chinese purchases of US goods. China believes the US has raised the amount above what was agreed between Trump and Xi in December.”

“On the other side of the table, Robert Delaney from SCMP writes about an ‘anti-Chinese blaze’ taking place in the US. He believes that ‘the fire that Trump started has grown over the past three years into a blaze that he can’t contain, pushing some US lawmakers and pundits to rhetorical extremes’.”

“Trump added some fuel to the fire on Wednesday by signing an executive order that effectively bans Huawei and ZTE from selling equipment to US companies and consumers due to national security. China immediately expressed strong opposition to the move.”

“After a string of confrontational tweets towards China over the weekend, Trump softened his tone on Tuesday stating he was sure it would all end.”

Source: FXStreet


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