Trade War Rhetoric Pokes the Bears

The US equities markets opened sharply lower today after President Trump again pushed for more tariffs on China. After approving $50B in tariffs recently, the President decided to push for $200B in tariffs on Chinese exports. The net result was a drop of about -3.50% for the Shanghai Index, and a smaller decline in the S&P 500. The markets are clearly signaling that the trade agenda being pushed by the Trump Administration will have a negative impact on larger companies abroad, but more importantly are signaling that Chinese companies will be hit harder by this then will US companies, which suggests that China is not in as strong of a negotiating positive as some might suggest. Here’s what to expect.