The White House introduces new trade duties on goods from China
The news about the introduction of new trade duties by the US against China led to the fall of the US dollar against other world currencies in trading on Monday.
Despite the fact that the risks posed by the trade war can spread to the European Union at any time, investors prefer the euro and the British pound, which can please at least some positive news.
Let me remind you that yesterday, there were rumors that the EU was discussing the possibility to allow representatives of the UK to control the goods supplied to Northern Ireland from the UK after Brexit. It should be noted that prior to these rumors, the control of the goods had to be assigned to the inspectors of the block.
Trump and new duties against China
Yesterday in the afternoon, US presidential adviser Larry Kudlow spoke, who stated that there is no reason to believe that current economic growth will not be sustainable. Kudlow also noted that he does not see any reasons that would indicate that Trump’s actions in the sphere of trade harm the economy, as there are no signs that duties are a problem for the US economy.
The presidential adviser also drew attention to the fact that the growth of the US budget deficit is not a consequence of tax cuts, advocating Trump policy and tax reform.
Closer to the closure of the North American session, news appeared that the administration of the US president announced a new duty of 10% on imports from China worth $ 200 billion. New duties in the US will come into force on September 24 and by the end of the year will be raised to 25%.
The Chinese authorities immediately announced their intention to introduce reciprocal tariffs on American goods.
No matter how funny it looked, but following the White House’s announcement of trade duties, the Ministry of Finance issued an appeal stating that the US still wants to hold another round of trade talks with China.
US President Donald Trump also appealed to the Chinese authorities, saying that he wants to reach an agreement.
Of the fundamental data that came out yesterday afternoon, you should pay attention to the report on production activity in the area of responsibility of the Federal Reserve Bank of New York, which grew in September at a slower pace than in August.
According to the data, the production index of the Fed of New York in September of this year was at the level of 19.0 points against 25.6 points in August. Economists had expected that in September the index would be 22 points.
Turkey is not enough for Turkey
Yesterday, the depreciation of the Turkish lira was noted, even in spite of the fact that the Central Bank of Turkey raised interest rates higher than inflationary levels. This was done in order to try to stabilize the national currency as soon as possible, as well as to limit the growth of inflation in the country that has been observed since the beginning of the conflict with the United States.
However, one rate increase is clearly not enough. For a real impact on inflation growth and maintaining the rate of the Turkish lira, statements from the Central Bank are required in which it will be clearly indicated on the increase in interest rates in the future. And these measures will go against the position of Turkish President Recep Tayyip Erdogan, who has repeatedly stated that he is against high stakes.