WHAT COULD POSSIBLY GO WRONG?
Financial follies and disaster in the making
optimistic comments from the president and several White House officials. Unfortunately, the good times didn’t last long... U.S. stocks opened deeply in the red again earlier this week, following news that China had retaliated against the latest U.S. tariffs overnight. According to the Wall Street Journal , China raised tariffs on roughly $60 billion worth of U.S. goods in retaliation for President Trump’s decision to escalate tariffs on Chinese imports. These tariffs will increase to 10%, 20%, or 25% for most of the 5,000-plus U.S. products on which China already imposes levies of 5% or 10%. Items like animal products, frozen produce, and seasonings will be charged at 25%, while baking condiments, chemicals, and vodka will be charged at 20%. Tariffs will stay at 5% for certain items, including vehicle parts, medical equipment, and farm equipment such as tractors.
China strikes back...
Last week, U.S. stocks sold off as the “trade war” with China suddenly escalated again... In early May, following weeks of positive talk from both sides, President Donald Trump unexpectedly threatened to raise new tariffs on Chinese imports. Days later – and just two days before officials were set to meet to finalize a deal – we learned why: China had suddenly “backtracked” on months of negotiations. Finally, on Friday, May 10, these new tariffs went into effect just as President Trump had warned... And the Chinese trade delegation left Washington, D.C., without a deal or definite plans to return. If there was a bright side to this mess, it was that the markets ended the week on a relatively positive note. Stocks reversed their morning losses and closed in the green on that day, following another round of
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May 2019
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