As the Chinese Vice Premier, Liu He, prepares to lead a Chinese trade delegation to Washington on Friday, US President Donald Trump has confirmed that tariffs will rise from 10% to 25% on $200 billion in Chinese goods. The hikes will kick in at 12:01 on Friday.
US Treasury Secretary Steve Mnuchin told reporters that the tariffs would be reconsidered if trade talks got back on track. The move to increase tariffs came after the US accused China of going back on commitments made in previous rounds of talks.
Thus far, no dramatic price movements have occurred in any of the major US markets. However, if either the scheduled talks are called off, or if they do not end on a positive note, it may be an opportunity to short the DJIA or some of the other US stock indices. With the US President known for erratic, unpredictable announcements via Twitter, it’s also worth keeping a close eye on anything he Tweets or says before Friday which could be seen to jeopardize the talks.
Likewise, if the talks proceed and positive announcements follow which indicate that the talks are back on track, markets are likely to enjoy a bump at the Friday close. Either way, there are opportunities for financial traders as this crucial moment in the proposed new trade deal approaches.
For ideas on how to take advantage of moves in global stock prices, see our financial betting section.