- US-China trade war heightens with new tariffs
The U.S.-China trade war, one of the biggest risks for the global economy, will again be one of the key agenda items this week.
The tensions between the to largest economies have been escalating even further as Washington and Beijing are starting to impose a new set of tariffs on a total of $ 260 billion worth of goods on Monday.
In the latest round of the trade war, U.S. President Donald Trump led the way, just like in the previous rounds.
He announced on Sept. 17th that a 10 percent tariff will be charged to $ 200 billion worth of products imported from China starting September 24th. China reciprocated with a $60 billion slap of tariffs.
Trump also noted that the tariff rate will increase to 25 percent on January 1, 2019.
“Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports” he said.
- China quits trade negotiations with US
Once again, Trump’s threats were not successful at deterring Beijing from retaliating. China quickly announced it will impose tariffs of 5 to 10 percent on $60 billion worth of U.S. products in response to new US tariffs.
The Chinese administration also announced that it will no longer participate in trade talks with the Trump administration.
A new round of negotiations was planned to start this week with two high level Chinese delegations visiting Washington.
The decision to pull out of talks came after the Trump administration moved forward with the new tariffs on $200 billion worth of Chinese products.
The trade war between the world's two largest economies is unlikely to end in the foreseeable future as Beijing stands its ground as the U.S. blows keep coming.
- Fed expected to rise its policy rate
The September meeting of the Federal Reserve Board is another major event in this week’s economic agenda.
The interest rate decision will be announced on Wednesday along with the economic projections of Fed officials.
Following the meeting, which is expected to end with a rate hike, Fed Chair Jerome Powell will hold a press conference.
Aside from the rate decision, global investors will focus on the “dot plot”, showing the interest rate projections of the Fed members, and Powell's messages.