(Beijing)

While the market might have taken a sigh of relief yesterday when the US tried to tone down the threat of a trade war with Beijing, make no mistake, China’s debut of a new package of tariffs is nothing to take lightly. The country proposed 25% tariff hikes on 106 US imports, including big ones like soy beans, cars, and chemicals. ““America’s measures [to impose tariffs] have violated the rules of the World Trade Organization and have seriously violated China’s legal rights”, said the country’s foreign ministry. “China does not want a trade war because no one will emerge as a winner in a trade war … but if someone insists on fighting a trade war, we will be there”, said the Chinese vice-minister of commerce.

FINSUM: So we are in a catch 22 with imposing higher tariffs. China has gotten the better of the deal for decades, but changing the terms is not going to be easy because of how big a consumer the country has become.