President Donald Trump seems to be looking to intensify the trade war by threatening another US$200 billion worth of tariffs onto Chinese goods. China implemented retaliatory measures after the Trump Administration's initial tariffs.
In a statement, President Trump said "China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening United States companies, workers and farmers who have done nothing wrong."
He seems to be implementing the best of his 'art of the deal' tactics to try to bring China to the negotiating table. However, I can't see China rolling over and letting its economic tummy be tickled.
President Trump may have a point, but it's this type of thing that could cause global economic growth to grind to a halt and cause more damage than good. Particularly as he is also jousting with allies on trade as well.
Australia in-particular is vulnerable to a Chinese-American trade war. We are politically aligned to the US, but more economically tied to China. Large amounts of direct and indirect of our economy relies on China. Think of resource stocks like BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO), consumer shares like Bellamy's Australia Ltd (ASX: BAL) and Blackmores Limited (ASX: BKL) as well as tourist shares like Sydney Airport Holdings Ltd (ASX: SYD) and Crown Resorts Ltd (ASX: CWN).
Foolish takeaway
I do not ultimately believe that either the US or China wants a global recession to start because of this. It could create more share market volatility, which could be a buying opportunity.