China Has Arsenal of Non-Tariff Weapons to Hit Back at Trump

Donald Trump’s threat to impose tariffs on an additional $200 billion of imported Chinese goods could see China retaliate with a wide range of non-tariff barriers. Because China only imports around $130 billion worth of goods from the U.S., its ability to match the tariffs dollar-for-dollar is limited. The U.S. imported $505 billion of goods from China last year. While China may jack up existing tariffs beyond the 25 percent level imposed so far, it could also inflict significant pain by increasing regulatory oversight of American companies, slowing down approvals processes, canceling orders for U.S. goods or encouraging consumer boycotts. Big American companies including Walmart Inc. and General Motors Co. host large operations in China and have plans for expansion that could be stymied. China has used these tactics before, notably against South Korea and Japan during previous political spats, with carmakers from the two nations among the victims. Read More @

The US took the first step in making good its threat to put a 10% tariff on $200 bln of Chinese goods in response to the PRC retaliating for the 25% tariff on $34 bln of its exports.  The US provided a list of products that will get the new tariffs after the public comment period is completed at the end of next month.  This time the list included numerous consumer goods, like digital cameras, baseball gloves, but have left off popular products, like cell phones, tablets, and personal computers.   China immediately objected and vowed to retaliate, but the tit-for-tat strategy is limited by the more modest US import penetration.  Still, there are various asymmetrical ways China can respond, and it may be best for it to just do it without making major announcements, such as squeezing US businesses operating in China, which incidentally sell more than $300 bln of goods there in addition to exports.  When considering the commercial relationship between the US and China, these domestically produced and sold goods are an important part even if the direct benefit to US employees is not straightforward.

‘Shocked’ by Latest U.S. Tariffs, Beijing Seeks Retaliatory Action – China can’t match Washington’s new tariffs as it has in previous rounds, so it is reviewing plans to hit back in other ways

BEIJING—The U.S.’s plan to wallop China with new tariffs is putting Beijing in a bind, forcing it to retaliate in ways likely to cast doubt on its commitment to rules-based global trade. Read More @


USD is back – Trump’s Trade War Sinks China’s Yuan Most Since 2015 Devaluation Read More @ Wedge remains for the USD for another rise if tonight the CPI rises – which most analyst are predicting.


  1. 9.00am – Australia – Expectations of future inflation can manifest into real inflation, primarily because workers tend to push for higher wages when they believe prices will rise; little or no volatility.
  2. 2.00 – 2.45pm – German and France CPI data – expected to be good.
  3. 7.30pm – ECB Monetary policy – we are expecting a hawkish statement from ECB. We stay neutral for EURO till the meeting is over.
  4. 8.30pm – Critical CPI data release – expected a little rise – we expect good volatility in the market. We are cautious over buying USD for now.

The market is truly unpredictable these days as Trump goes head on anytime and anywhere in his policies; be cautious and always has money management in place.

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