Uncompromising messages from Beijing this week suggest that China’s leaders have concluded that there in no prospect of a resolution to the trade war any time soon. Limits on China’s rare earth exports, sanctions on US firms, a weaker renminbi and restrictions on China’s services imports from the US are now all on the table. In the coming week, May’s trade data will reveal the initial impact of the increase in tariff rates from 10% to 25% that was introduced on $200bn of goods midway through the month, while the inflation data will be scrutinised for evidence of the spread of swine fever.
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