The countermeasures by Beijing came quickly. China announced new duties on some American products yesterday, which depressed the US dollar against such currencies as the Japanese yen, Australian and Canadian dollars.
Considering the recent events, it seems that the relations between the two leading world economies will become frosty for the next few months until any of the parties decides to resume talks.
Earlier, Donald Trump wrote on Twitter:
"I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. "
For now, Washington is about to consider launch duties against the EU. Specifically, the European countries have already stated that similar measures would be taken if the possible measures have taken place. The EU position was explained by the trade representative of the European Union. It was also reported that the EU and US spokespersons are about to hold a meeting next week.
The market doubts that Washington and Beijing will meet many times, especially given the experience of the past year, when they held numerous meetings but without any results. Duties on cars are on the way, and it is necessary to wait for countermeasures by the EU.
Nevertheless, the current market development is hardly a promising one for the Germany automotive giants and stock prices.
Meanwhile, the oil market has rebounded on the risks coming from the Middle East. In particular, the geopolitical threat stays behind the observed oil price boom. For reference, Saudi Arabia reported that two oil tankers were attacked on their route to the Arabian Gulf last weekend.
Moreover, we should also take into account the meeting of the cartel regarding renewal of the oil production cut agreement slated for May 19.