Where do we go from here?
Only days after the U.S. and China described their first return to the trade negotiating table since May as constructive, Donald Trump shattered the truce by announcing new 10% tariffs on Chinese goods ranging from smartphones to children’s clothing.
In doing so, the president resisted Treasury Secretary Steven Mnuchin’s proposal to give China advance warning, Bloomberg’s Washington bureau exclusively reports. The sudden tensions sent stocks tumbling globally.
China’s response was robust. A Foreign Ministry spokeswoman warned that Beijing will take counter measures if Trump goes ahead with the threatened tariffs and made it clear the ball is in the U.S. court.
The renewed standoff throws up in the air how the trade talks can proceed: Both sides were due to meet in Washington in September. Observers said it dims any prospects for a near-term breakthrough and sets the ground for a protracted dispute between the world’s two biggest economies.
Yet Trump’s hawkish stance only extends so far. Asked by reporters on the situation in Hong Kong, he labeled the recent protests “riots,” adopting the language used by Chinese authorities and suggesting the U.S. would stay out of the issue.
The escalation was swift and unexpected. Walking it back may not be as easy.
