US president Donald Trump has been in the headlines in relation to his Gaza peace plan. But he continues to pursue an aggressive trade agenda. On Friday, the US president threatened steep new tariffs on China in a dispute over Chinese restrictions on exports of rare earth minerals.
Trump has left some time for negotiation, with the tariffs not due to come into force until November 1st. But financial markets took fright after his Truth Social post on Friday, with the S&P 500 of US shares falling 2.7 per cent.
What happens next will be important. Trump was due to meet Chinese president Xi Jingping at an Apec summit late this month. But having introduced the new controls on exports of rare earths and critical minerals, requiring companies to get the go ahead from Beijing to export them, China cannot now easily back down. These products are essential for many industries, including the automotive sector.
Earlier this year a full-scale trade war broke out between the world’s two biggest economies, with tariffs of well over 100 per cent applying in both directions. Diplomatic progress had led to significant tariffs reductions, but hopes that a meeting between Trump and Xi could underpin this positive trend have been dashed.
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Now there will be fears that a full-scale trade war will return, raising further risks for the world economy. On Sunday Beijing hinted at serious counter measures if Trump carried through his threats. . Investors will mull the options now facing both sides and whether Trump would be prepared to dig in for a long trade war, taking the risks that this would involve for the US economy.
Trump’s latest move shows that he remains ready to raise the temperature with reckless threats. The EU – and Ireland – will look on nervously. Despite the trade deal between the two sides, there are some key issues – such as the regulation of big US digital firms – which remain potential flashpoints between the EU and the US. The transatlantic economic relationship, in other words, remains under threat. US president Donald Trump has been in the headlines in relation to his Gaza peace plan. But he continues to pursue an aggressive trade agenda. On Friday, Trump threatened steep new tariffs on China in a dispute over Chinese restrictions on exports of rare earth minerals.
Trump has left some time for negotiation, with the tariffs not due to come into force until November 1st. But financial markets took fright after his Truth Social post on Friday, with the S&P 500 of US shares falling 2.7 per cent.
What happens next will be important. Trump was due to meet Chinese president Xi Jingping at an Apec summit late this month. But having introduced the new controls on exports of rare earths and critical minerals, requiring companies to get the go ahead from Beijing to export them, China cannot now easily back down. These products are essential for many industries, including the automotive sector.
Earlier this year a full-scale trade war broke out between the world’s two biggest economics, with tariffs of well over 100 per cent applying in both directions. Diplomatic progress had led to significant tariffs reductions, but hopes that a meeting between Trump and Xi could underpin this positive trend have been dashed.
Now there will be fears that a full-scale trade war will return, raising further risks for the world economy. Highly valued US markets already look vulnerable and reacted nervously on Friday. Investors will mull the options now facing both sides and whether Trump would be prepared to dig in for a long trade war, taking the risks that this would involve for the US economy.
The US president’s misguided policies are already taking a toll on world trade. Trump’s latest move shows that he remains ready to raise the temperature with reckless threats. Despite the trade deal between the two sides, there are some key issues - such as the regulation of the big US digital firms – which remain potential flashpoints between the EU and the US. The transatlantic trade relationship rem
