US-China trade war
The US (SPY) and China (FXI) have imposed tariffs on $16 billion worth of goods. The tariffs were imposed even though mid-level officials from both countries engaged in talks in Washington, DC. The talks were never expected to stop the tariffs. The talks were scheduled between mid-level officials—compared to the previous round of trade talks when President Trump was involved. In an interview with Reuters, President Trump admitted that he didn’t “anticipate much” from the current round of talks.
Currently, the talks and tariffs are occurring at the same time, which seems to be the template for the US-China trade war. Neither side has shown any signs of backing down from the trade war. Although some of the regions including the European Union have taken an approach of reconciliation to President Trump’s tariff threats, China has been a formidable opponent.
While the broader US equity markets (QQQ) are riding to fresh all-time highs, metal and mining stocks like Freeport-McMoRan (FCX) and Alcoa (AA) have taken a beating due to the US-China trade war. Commodity prices have been weak this year due to concerns about China’s economic growth. The stronger US dollar hasn’t helped commodities either.
The general feeling is that the trade war would likely hurt China more than the US. China exports more goods to the US. However, even US businesses and consumers would likely feel the pinch from tariffs. Read How Much Could the Trade War Cost US Consumers? to learn more.