Crude oil and industrial metals are trading lower today amid concerns about economic impact of US-China trade worries.
Earlier this week, Trump administration proposed imposing 25% tariffs on about $50 billion worth of Chinese-made products. China retaliated by announcing that it will impose reciprocal tariffs on 106 US products totaling $50 billion per year.
Risk sentiment improved as US and Chinese officials indicated they're willing to negotiate on escalating trade frictions.
Tensions emerged again as President Donald Trump ordered his administration to consider imposing tariffs on an additional $100 billion in Chinese imports. Chinese state media on Friday slammed Donald Trump’s threat of more trade action against China as “ridiculous”.
None of these import tariffs are to be implemented immediately however threats of more tariffs will affect the prospect of a negotiation between the two nations.
Market players are trying to assess economic impact on both US and Chinese economy. The Chinese economy is dependent on exports, and nearly 20% of its exports go to the US. It sold $506 billion in stuff and services to the US last year. In contrast, the US sold $130 billion to the Chinese.