“The proposed product list covers essentially all products not currently covered by action in this investigation”, the US Trade Representative said Monday evening, in a post detailing prospective tariffs of up to 25% on $300 billion of Chinese goods.
The publication of the list was expected. Last week, as the tariff rate on $200 billion in Chinese goods more than doubled, US negotiators reportedly told China that Beijing has one month to strike a deal with Trump or face duties on everything the country exports to America.
On Monday, Beijing retaliated to Friday’s escalation, promising increased tariffs on some 2,500 US products from June 1. The Global Times threw in a nod to “dumping” US Treasuries for good measure.
US markets melted.
The S&P had its worst day since January 3, the session before Jerome Powell ushered in 2019’s risk asset surge with remarks in Atlanta. 10-year yields fell to the lowest since the late-March growth scare (when DM bonds surged following the second consecutive dovish surprise from the Fed and amid acute jitters about the German economy).
But the real pain was in tech. Monday was among the five worst sessions for the Nasdaq 100 since Vol-pocalypse. Amusingly, 101 names in the index fell, seemingly defying logic (there’s an explanation). The SOX lost nearly 5% on the day.
We documented most of this in real-time, of course, but there was no stick save on Monday. Stocks got a shallow, fleeting reprieve when Trump told reporters he’ll meet with Xi at the G-20 summit, but that was about it.
If you’re wondering just how absurd and surreal Trump’s trade war with China has become, do note that among the items included in the USTR’s new list of products that will be subject to tariffs in a hypothetical next round are “live foxes”, “live asses”, “human hair, whether or not washed”, “fresh cut orchids”, “false beards”, “metal forks, without their handles”, padlocks, snowblowers and hand-held blowtorches.
I know. I know.
The full list can be found below. Suffice to say when Trump says “all-in”, he means “all-in.”