In a recent interview, Kevin Hassett, Director of the US National Economic Council, expressed optimism regarding ongoing tariff discussions with the European Union, stating there is “enormous progress” being made. Issues such as the potential for a recession were addressed with Hassett asserting, “100% not expecting a recession,” and highlighted that “rare earth limits are being studied very carefully” with a keen eye on China as well.
The US Dollar Index displayed minor recovery from its daily trough, marking a slight decline of 0.1%, landing at 99.70 at the start of the American session. The market remains vigilant amid ongoing tariff discussions and their impacts on trading dynamics.
The backdrop of the US-China trade war is essential for understanding current economic tensions. Initiated by President Trump in 2018 due to claims of unfair practices, it has led to a series of retaliatory tariffs impacting both countries. This complex relationship, which saw a momentary easing with the Phase One trade deal in early 2020, has reignited under Trump’s renewed promises to hike tariffs significantly if re-elected.
The potential for escalating tariffs once again has casting shadows over global markets, case in point: Trump’s pledge of imposing 60% tariffs on China upon his return to power risks reigniting economic strife, hampering global supply chains and possibly fuelling inflation. Investors are cautioned about the risks associated with such volatile economic predictions, stressing the need for thorough individual research before engaging in market activities.
Kevin Hassett of the National Economic Council has reported significant progress in tariff talks with the EU, dismissing recession fears and monitoring rare earth limits. The US-China trade war continues to impact markets as Trump vows to impose higher tariffs upon re-election, which could lead to economic disruption and inflation. Investors are advised to research thoroughly due to existing market uncertainties.
In summary, the dialogue surrounding tariffs with the EU is yielding positive signals, while concerns persist regarding a potential recession and China’s trade practices. The US-China trade war continues to evolve, particularly with impending tariff impacts anticipated under Trump’s leadership. As market dynamics shift, it remains crucial for investors to remain informed and cautious amidst the risks involved in trading.
Original Source: www.fxstreet.com
