More on Goldman Sachs – China retaliatory measures to have limited impact on energy prices

Trump’s extra 10% tariffs on China came into effect on Teusday, February 4.

China’s retaliation followed just hours later:

• China announces counter-tariffs against Trump’s trade moves
  • levies of 15% for US coal and LNG, 10% for crude oil, farm equipment and some autos
• China anti-monopoly regulator launches investigation into Google

As yet, there is no sign of a conversation taking place:

• WSJ: Pres Trump and China Pres. Xi are not speaking today

I posted earlier on the GS analysis:

• Goldman Sachs – China trade war retaliation measures to have a limited energy price impact

Adding a little more now:

• “We believe near term implications to commodity markets will be limited given that neither global supply nor demand of these commodities are changed by China’s tariffs,”
• impacted U.S. volumes likely to find alternative buying markets easily
• China to replace impacted import volumes with alternative suppliers
• for coal, GS expects US volumes to be redirected to Japan and Korea, which will likely release local Pacific basin supplies to go to China instead
• China crude oil imports from the US are small

Also, the above:

• Financial Times: China’s exporters to step up offshoring to beat Trump’s tariffs

This article was written by Eamonn Sheridan at www.forexlive.com.