Here’s a quick summary according to Goldman Sachs economists Alec Phillips and Andrew Tilton.
- To retaliate against the steel and aluminum import tariffs, China can:
- Impose their own import restrictions and tariffs on US products/services—i.e. agricultural goods and transport equipment–to China.
- Implement unfavorable regulatory actions against US companies in China.
- Use exchange rate depreciation to counter the effect of tariffs on their exports.
- Sell US Treasuries and other US assets.
- Shift their stance on geopolitical issues in a manner unfavorable to the US; particularly North Korea.
The risk of loss in the trading of stocks, options, futures, foreign exchanges, foreign equities, and bonds can be substantial and is not suitable for all investors. Trading on margin or the use of leverage is not suitable for all investors and losses exceeding your initial deposit is possible. Supporting documentation is available upon request. Trading futures, options on futures, and foreign exchanges involves substantial risk of loss and is not suitable for all investors. Carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources and only risk capital should be used. Opinions, market data, and recommendations are subject to change at any time. The lower the margin used the higher the leverage and therefore increases your risk. Past performance is not necessarily indicative of future results.