The dark clouds surrounding markets aren't going disperse just yet
- Trump hits China with fresh 10% tariffs on remaining goods
- Pres. Trump speaking at a rally in Cincinnati: We will be taxing the hell out of China
- US Secretary of State Pompeo: Time for China to stop taking advantage of trade
Risk assets aren't seeing a reprieve for the time being and may not have good reason to do so until we measure up how China will respond to Trump's latest tariffs announcement.
So far, all we have is senior diplomat Wang Yi's remarks here but it hardly is anything substantial and doesn't reveal much about what the administration is planning in response to the latest escalation in trade tensions.
If anything else, the latest move by Trump casts heavy doubt about the proposed meeting in September and we could yet enter another "cold war" period between the two countries like what we saw prior to the Osaka meeting.
Should that be the case and China call off the meeting, expect risk assets to take another hit with haven flows set to build on overnight gains amid fears that the trade war is not headed for any form of resolution.
Not like it ever was anyway but at least talks gave the illusion that there was progress.
