"No, you hang up"... (but with geopolitical tension instead of puppy love). One business day after President Trump hiked tariffs on Chinese-made imports from 10% to 25%, China announced higher tariffs on $60B in USA-made goods starting June 1st. That dropped stocks the moment Monday's markets opened.
"Americans' entire shopping cart will get more expensive"... Straight talk from a Walmart/Target lobbyist. Since Friday, half of Chinese imports have a 25% tariff — The other half is full of goodies you're probably wearing/touching/tapping right now (electronics, t-shirts, Silly Puddy). Here's what's surprisingly hit on both sides:
- The next $300B of US tariffs on China: Purebred horses, 122 different kinds of footwear, coffee makers. Our highlight from the super-detailed list: "Footwear w/outer soles & uppers of rubber or plastics, nesoi, n/cov. ankle, nesoi, valued o/$6.50 but n/o $12/pair."
- The next $60B of Chinese ones on the US: Honey, salted beef, "fine and coarse rice," tequila, gin, bricks, watches, chalk, canoes, and 5,000 more things.
- Fun fact: Both China and the US are tariff-ing shoes made by the other. But it doesn't cancel out.
Hold your breath until June 28/29... President Trump meets Chinese President Xi Jinping at the G-20 Summit in Japan. Trump said he could decide not to impose those new tariffs if they agree to something. But markets are bracing for the full-blown, tit-for-tat, back-and-forth trade war we're in. The impact of each tariff is higher prices and less profit.