Additional tariffs on Chinese goods will weigh on China’s growth, short AUD/USD?
President Trump recently announced a 10% tariff hike on an additional USD200 billion of Chinese imports, starting 24th September. Furthermore, he also said that the tariff will kick up to 25% starting 1st January next year.
- China’s Vice Premier Liu He, President Xi Jinping’s top economic adviser, is said to convene a meeting in Beijing on Tuesday morning to discuss the government’s response. China CSRC Vice Chairman Fang Xinghai said that China is prepared for the worst-case scenario, and they see tariffs negative impact on China GDP is only about 0.7%.
- Chinese assets are already among the world’s worst performing this year as US threatens to aggravate an economic slowdown and complicate the nation’s efforts to cut debt in the financial system.
- Moreover, things may change with this round of tariffs, as consumers will start noticing the impact of the tariffs such as inflation jumps.
- China’s slowdown in growth amid trade tariff may continue to drag Aussie dollar lower.
Fullerton Markets Research Team
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