China announces increase of additional tariffs on US goods to 125%

Both the dollar and risk trades are getting hit on the headlines here as China continues to go blow for blow with Trump on the tariffs front. But at this point, does the number really matter? The latest increase sees the additional tariffs go up to 125%, from 84% previously. This will go into effect from 12 April.

Well, whether 125% or 200%, the understanding is that US-China trade relations are officially on ice. There’s just no longer any relevance to trade and I would assume businesses on both sides will also seize trade operations until this blows over. It’s all just a number at this point.

As mentioned earlier, the main thing is still watching to see who will blink first between Trump, China, or the Fed. And right now, China is clearly saying that it isn’t going to be them.

30-year yields in the US are now up to 4.91% on the day. Is Trump going to blink again as he did on Wednesday? Or is the Fed going to come to the rescue of the bond market?

This article was written by Justin Low at www.forexlive.com.