Market flash: protectionist fears abated

Donald Trump advanced further on his protectionist drive by unveiling a staggered timetable for tariffs on Chinese imports to the US while increasing the amount to $200bn.

The targeted goods will be first be taxed at 10%, rising to 25% from 2019. If China retaliates by going for US agriculture, the US President will increase targeted products to $267bn. Markets were reassured when China’s riposte was measured and investors chose to refocus on the economy which looks strong enough to absorb most of the dispute’s harmful consequences.

Protectionist fears abated further when Beijing ruled out a renminbi devaluation. Investors decided that both Donald Trump and the Chinese were for now proving more reasonable than had been feared and sent risk assets higher, especially in emerging countries.