LAUNCESTON, Australia (Reuters) – U.S. President Donald Trump has just given commodity markets a reminder that stormy waters can blow up quite quickly even if the voyage ahead was looking like smooth sailing.
Investors were becoming complacent with the idea that the U.S.-China trade dispute was heading toward an eminently sensible and mutually beneficial resolution before Trump’s latest Twitter outburst.
Trump tweeted on Sunday that he will raise U.S. tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent on Friday, and threatened to targets hundreds of billions of dollars more in trade.
His ire appears to be at what he termed the slow pace of progress in the trade talks and Chinese attempts to “renegotiate”. Trump’s comments stand in contrast to the recent positive signals emanating from both the U.S. and Chinese camps that progress to end the tit-for-tat tariff war was being made and a deal was within sight.
There is a whole cottage industry of analysts dedicated to trying to understand Trump’s tactics and motivations, but possibly the most sensible method of dealing with the mercurial U.S. leader is to assume no progress and the worst outcome until proven otherwise.
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