Outside … control is now the financial (not just commercial) clash between USA and Chinaas President Trump’s latest decision shows to focus on China’s tariff fire.
Trump announced that It further increases US duties at the expense of imports from Chinaby defining them in the astronomical percentage of 125% versus 104% they had just one day before, ie yesterday.
At the same time He put on the ice for 90 days (ie 3 months or otherwise until the beginning of July 2025) the duties he had announced on April 2, 2025 (in order to apply today April 9) in most other countries, without nameing them.
If EU members are included in countries that will not be imposed for 3 months, then the EU is expected to suspend duties that have decided today for US exports of 21 billion euros.
Behind this double movement (that is, on the one hand the suspension of tariffs for many countries and the increase in duties for China), analysts see The US’s attempt to push the Chinese even further in order to exclude any possibility of selling US government bonds in their portfolios, which would lead to their massive depreciation and a borrowing costs of the US unauthorized by Trump.
The tuning of the duties
However, so far, the White House had announced that nearly 75 countries on the planet had requested a negotiation with the US to avoid duties at least 10% that Trump had announced just a week before.
On the contrary, with most countries imposed by the US duties, China responded after the 34% duties initially announced by Trump with 34% duties.
Yesterday (8.4.25), Trump responded to the… response of the Chinese, announcing 104%duties. Against this second tariff attack, Beijing announced 84%duties (instead of 34%) to bring Trump today to raise the bar to 125%.
Prior to this move, the US indicators fell, and after this move they marched upward.
Up and down the yields of US government bonds
But there is also Another much – a very important indicator that began a downward course, after the new ejecting of US duties against China, and this is the yields of US government bonds, which have begun to fall again, but without showing it.
A decrease in US bond yields is equivalent to a reduction in US borrowing costs, which for Trump and the financial staff is the main target of the tariff attack, knowing that the turn of investors from the shares, leads to a reduction in US duties. dollars.
This “model” worked until a few days ago (as US bond yields even reached 3.9% compared to 4.6% before Trump’s oath, ie January 2025), when the increase in US bond yields (around 4.4%).
Early this morning the Bloomberg had implied that behind the tendency to increase yields of US bonds It could be a tendency to sell out these titles from China, which is their largest owner internationally.
The suspension of duties in most countries and the increase in US duties against China seems, at the moment, that it has convinced investors not only to return to the US shares – a fact that has led to prices – but not to start again to consider US bonds to be “safe” …
In addition to this dimension of the counter between China – USA, there is that of the currency. In order to face the upcoming increase in prices of its products due to US duties, it has recently been undergoing a gradual depreciation of its currency against the dollar.