Research China: Trump’s Tariff Hammer to Hit Chinese Growth, Stocks and CNY Lower – Action Forex
In this short piece, we try to answer five questions on Trump’s tariff hike on China. US tariffs on China are set to move to 65-70% on average according to our calculations. This will deal a serious hit to Chinese growth – both directly and because global growth is likely to see a set-back from Trump’s widespread tariff increases. China will mitigate some of the blow with more stimulus, though, and an even sharper focus on reform implementation. China is also set to retaliate but will aim not to escalate. There is a good case tariffs will eventually end up at a lower rate on the other side of negotiations and a deal. But the road ahead to get there is set to be bumpy. Chinese stocks and currency look vulnerable in the short term.
