US tariffs, PBOC easing, property controls

President Trump’s latest threat to put further tariffs on Chinese goods is unlikely to trigger the hoped-for concessions from China. With the direct hit to China’s economy still manageable, President Xi has more to lose – not least in appearing personally to be caving in – than he would gain from making changes to industrial policies that both he and the White House hawks believe have served China well. As such we expect the tariffs to go ahead and furthermore that they will be raised, to 25% on all Chinese goods imports to the US, before long. Meanwhile this week, the clear message from policymakers even before Mr Trump tweeted his bombshell was that policy easing will continue, but with the property sector notably being excluded.