An investor monitors stock prices at a securities exchange firm on 2010’s last day of trading, in Shanghai, China. (Photographer: Qilai Shen/Bloomberg)

TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat

05/10 03:55 ET
KEY TAKEAWAYS: U.S. Imposes 25% Tariffs on About $200 Billion of Chinese Goods; China Threatens `Countermeasures' But Hasn't Specified Any; First Day of High-Level Talks End With Little Progress; Negotiations to Resume Friday; Financial Markets Were Whipsawed, Prompting Intervention By China State Funds; Shanghai Composite Closed 3.1% Higher and Yuan Rose; China's Foreign Ministry Spokesman Says He Wasn't Aware of Any Xi-Trump Phone Call
Here are the KEY TAKEAWAYS from U.S.-China trade tensions Friday:
  • The Trump administration imposed a 25% tariff on more than $200 billion in Chinese goods, up from 10% before, in its most aggressive step yet in the trade war. China said it will take ``necessary countermeasures,'' though has yet to specify them
  • Day one of talks between top Chinese and U.S. economic officials in Washington ended with little progress and a downbeat mood, according to people familiar with the talks. Negotiations are set to resume Friday morning
  • Asian markets were whipsawed in heavy trading as trade news emerged, with stocks swinging from gains to losses. As the Shanghai Composite slumped 3% from the morning-session high, state funds intervened to prop up stocks, people familiar with the matter said. The index closed up 3.1% and the yuan rose
  • Investors are also on the lookout for any sign of a call between Presidents Donald Trump and Xi Jinping, after Trump said he’d received a letter from Xi and flagged the potential for a phone conversation between them
  • Next steps to watch include the details on China’s retaliation, news on any broader stimulus efforts to safeguard growth and on any move by Trump to impose new 25% tariffs on $325 billion more of imports, a threat that he reiterated Thursday
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 03:55 ET
Thank you for following our coverage of the ongoing China-U.S. trade spat. We're going to end this TOPLive coverage here. We'll leave you with a QuickTake explainer of just how we got here:

Bloomberg Terminal users can continue to track developments by searching for {NEWS ON CHINA AND TRADE BY BLOOMBERG }. Web users should keep checking https://www.bloomberg.com for all the latest.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Enda Curran  Chief Asia Economics Correspondent

05/10 03:50 ET
And here's a final snapshot of the broader markets:
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Colin Keatinge  TOPLive Editor

05/10 03:48 ET
Here's one more snapshot of the China markets -- the stocks quite noticeably closing up, most likely due to that move by state funds, as reported by my colleagues:
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Colin Keatinge  TOPLive Editor

05/10 03:47 ET
The trade hawks in Washington will be encouraged by how markets are faring so far. Stocks in Europe and Asia are rebounding, even as U.S. futures fluctuate. It goes to the point I made earlier that investors still seem set that a deal will be done. Let's see.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:46 ET
I'm struck by the curious line touted by some market watchers about how the 2-3 week gap between goods leaving China today before reaching the U.S. could be the window for a deal to be done. Goldman touted the idea earlier and Fidelity, the investment giant, has a similar view.
"It is worth noting that the increase will only impact products that leave China from May 10 and not those currently in transit which may still provide time for the Chinese and U.S. authorities to reach an agreement."
Enda Curran  Chief Asia Economics Correspondent

05/10 03:31 ET
I agree with Chris. MOFA played a very straight bat but that wasn't unexpected. The global Friday is young yet.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:31 ET
Here's ING's call on where China goes next, Iris Pang, Greater China economist, writes in a research note:

First, it will impose higher tariffs on most U.S. goods shipped to China. But this won't make up the whole amount of tariffs imposed by the U.S. on Chinese goods.
Second, it will make life more difficult for U.S. companies operating in China, possibly by stepping into M&A deals in China

ING doesn't see China selling U.S. Treasuries. But it didn't explicitly rule out a threat to stop buying them -- which is another tactic analysts have told us to be on the lookout for.



Michelle Jamrisko  Economy/Government Reporter

05/10 03:29 ET
It's not impossible we still hear from China later today what the detailed retaliation will be. We've seen that last year, so it's important not to read anything into the lack of immediacy. That is, we shouldn't take it as a sign that maybe retaliation might not be coming soon or might be limited.


Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 03:28 ET
The press conference, such as it was, ends.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Enda Curran  Chief Asia Economics Correspondent

05/10 03:28 ET
The briefing is over.
Zhe Huang  Senior Editor

05/10 03:27 ET
Away from the briefing, some further sobering news on China growth:

China Car Sales Fall for 11th Straight Month
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 03:26 ET
Foreign Ministry spokesman Geng effectively says -- go ask the commerce ministry.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Enda Curran  Chief Asia Economics Correspondent

05/10 03:26 ET
Kevin is back. This time on North Korea's missile launch and he again tries on trade, asking for details on the planned retaliation.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:25 ET
I think at this point we can conclude that the Foreign Ministry isn't going to be detailing the China retaliation in this briefing.

"Stay tuned," Geng said, noting again the Ministry of Commerce's statement earlier today.
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 03:25 ET
After a valiant attempt by the BBC to garner more detail on the trade news, Geng repeats that the commerce ministry already released a statement and we should all ``stay tuned.''
Enda Curran  Chief Asia Economics Correspondent

05/10 03:24 ET
Geng asked reporters (pictured) to stay tuned for more information on detailed measures, without mentioning any.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Zhe Huang  Senior Editor

05/10 03:24 ET
Now question on retaliatory measures.
Zhe Huang  Senior Editor

05/10 03:24 ET
Now we're getting a question on the U.S. blocking China Mobile. Geng says Chinese companies are encouraged to abide by the law and urges the U.S. to provide and fair and unbiased environment for Chinese companies. Not much in that.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:21 ET
Geng says both countries need to meet each other half way to ensure stable bilateral relations. As an early observation - and I stress early - it feels like Geng wants to run the clock down here and bat trade questions to the commerce ministry.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:21 ET
China wishes for a coordinated, cooperative and stable relationship with the U.S., Geng said, adding that the U.S. needs to meet China half way.
Zhe Huang  Senior Editor

05/10 03:20 ET
Geng Says China and U.S. Must Meet Halfway for Stable Relations
Tony Jordan  Senior Editor

05/10 03:19 ET
Foreign Ministry spokesman Geng said he's not going to repeat what the commerce ministry has said about the trade talks.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Zhe Huang  Senior Editor

05/10 03:19 ET
Next question is back on the trade talks
Enda Curran  Chief Asia Economics Correspondent

05/10 03:17 ET
We're now onto a question on fentanyl and opioids and how it relates to the trade talks.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:17 ET
China Says U.S.-China Leaders Maintain Contact in Various Ways
Leaders of U.S. and China have maintained contact through various means, Geng said.
Zhe Huang  Senior Editor

05/10 03:16 ET
My colleague Kevin Hamlin asked Shuang about the talks. He responds that he hasn't heard about the issue asked about and both leaders Xi and Trump have maintained communication he says, according to remarks via the interpreter.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:16 ET
Geng said he has not heard information regarding Xi-Trump talks.
Zhe Huang  Senior Editor

05/10 03:15 ET
First question Geng answered is about China-Japan-South Korea cooperation, not the U.S. tariffs.
Zhe Huang  Senior Editor

05/10 03:13 ET
Floor opens for questions after a brief intro. First question is on a trilateral cooperation event in Beijing. Not exactly on message.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:12 ET
China needs to thread a bit of a needle at this briefing. Hawks in Beijing will already be smarting that their vice premier traveled to Washington but Trump went ahead and hiked tariffs anyway. So the issue will be how to send a firm response and even detail their retaliation while keeping the door open for more talks.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:12 ET
Chinese Foreign Ministry spokesman Geng Shuang arrived for the briefing, wearing a red tie.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Zhe Huang  Senior Editor

05/10 03:11 ET
Here we go.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:09 ET
Here's a QuickTake explainer by Moxy Ying on the array of state funds that can be called on when things get choppy in China's stock market. It sounds like some might be in action today.
When Stocks Crash, China Turns to Its `National Team': QuickTake
Grant Clark  Asia Editor

05/10 03:06 ET
Fitch Says `Potential Impact to China's Sovereign Ratings Could Be Much More Serious'
Fitch sounding cautious on China's credit rating. While the move to 25% won't impact its A+ rating on China, an escalation would be a different issue. Here's Andrew Fennell, Director, Sovereign Ratings, Fitch Ratings.
“If trade tensions eventually lead to blanket US tariffs on all Chinese goods, the potential impact to China’s sovereign ratings could be much more serious, as it may tempt the authorities to abandon their restrained approach to policy easing, and fall back on credit stimulus measures that further exacerbate the country’s already significant financial vulnerabilities.”
Enda Curran  Chief Asia Economics Correspondent

05/10 03:05 ET
On China's Weibo social media platform, people are now using "sweater stop," a homophone for "trade war" in Chinese, to slip past the censors. Despite significant global attention, the topic isn't among the 50 most discussed topics on the Twitter-like service. Other than the official Wechat accounts of China's three mega state-owned media -- Xinhua, People's Daily and CCTV -- only about 10 comments from readers, all voicing strong confidence and stating enthusiastic support to the country, are visible.
Dandan Li  Bloomberg Government Team

05/10 03:03 ET
If you're just tuning in, we are standing by for the Chinese foreign ministry's daily press briefing, which may or may not shed light on where things go from here.
Enda Curran  Chief Asia Economics Correspondent

05/10 03:02 ET
Shanghai Composite Index Closes Up 3.1% to 2939.21
China's Shanghai Composite Index Closes Up 3.1% to 2939.21
Tony Jordan  Senior Editor

05/10 03:00 ET
Although this briefing will be dominated by today's news, there's no certainty that MOFA will offer anything new. Their briefings can often be dominated by platitudes and stock standard diplo speak. So we'll have to see if they get into the detail of how China will retaliate - the one question we are all asking.
Enda Curran  Chief Asia Economics Correspondent

05/10 02:58 ET
That was a sharp observation by Chris earlier on the likelihood of stock market intervention. Clearly the relevant authorities want to shore up stability and control sentiment. It's a similar story with news media whose trade war coverage this week has been subjected to heavy censorship, as my colleagues in Beijing have been reporting on.
Enda Curran  Chief Asia Economics Correspondent

05/10 02:57 ET
Bloomberg terminal subscribers will be able to follow the Foreign Ministry briefing at {LIVE } - though of course it will all be in Chinese. You can click here to directly access the entry.
Colin Keatinge  TOPLive Editor

05/10 02:57 ET
We are waiting for the Chinese foreign ministry's daily briefing to start in 3 minutes. Questions could include how the first day of talks went, what China's retaliation measures could be, and whether Trump and Xi will speak over the phone. Though we are not sure if the spokesman will answer them all.
Zhe Huang  Senior Editor

05/10 02:52 ET
So, as we had already surmised, there's reporting now that says indeed Chinese state funds have been in the market, explaining that big V shape in the intraday trading graph.
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 02:50 ET
State Funds Jumped in After Lunch Break, People Familiar Said
Colin Keatinge  TOPLive Editor

05/10 02:50 ET
China State Funds Prop up Stocks After Hit From U.S. Tariffs
China State Funds Prop up Stocks After Hit From U.S. Tariffs
Colin Keatinge  TOPLive Editor

05/10 02:47 ET
President Trump's base has clearly stood by him on his "America First" policy and his tough stance on China. Yet he risks some political fallout from the tariffs in farm states, like Iowa where soybeans could be targeted for retaliation by China, and in Montana and other grain states that have already been hit by falling prices as a result of tariffs. The 2020 election is still a year and a half away yet Democratic presidential candidates are starting to use the tariffs as a talking point in these states.
Jodi Schneider  Senior International Editor

05/10 02:43 ET
For all the negativity (and there's a bit going around) it seems that economists are by and large still expecting a deal to be done.

A note just in from Standard Chartered captures that mood. While they reckon things will worsen before they get better, the bigger picture remains intact with a deal still on the cards over coming months.
Enda Curran  Chief Asia Economics Correspondent

05/10 02:41 ET
If Le Maire thinks the U.S. and China trade war will destroy European jobs, one can only imagine what he thinks U.S. tariffs on European car imports will do. That cab is still waiting on the rank.
Enda Curran  Chief Asia Economics Correspondent

05/10 02:40 ET
French Finance Minister Says U.S.-China Trade War Will Destroy European Jobs
Over in France, Finance Minister Bruno Le Maire says the U.S.-China trade war will destroy European jobs.
Colin Keatinge  TOPLive Editor

05/10 02:38 ET
One casualty of the dispute could be China's car industry. The standoff with the U.S. makes another tax cut on auto purchases less likely. Those cuts have typically helped local brands and another reduction could kick up cries of unfair practices, say Bloomberg Intelligence analysts Steve Man and Kevin Kim.
Frank Longid  Bloomberg Intelligence Editor

05/10 02:36 ET
President Trump has been proclaiming that the costs of the tariffs are "mostly borne by China" and earlier this week said the U.S. Has "taken well over $100 billion" from China this year. Yet that is a somewhat misleading statistic. In some cases, American consumers are paying higher costs for products being imported and in other cases, Chinese producers are shifting production outside China to avoid the tariffs.
Jodi Schneider  Senior International Editor

05/10 02:34 ET
U.S. businesses and consumer organizations that thought they'd won a battle months ago for U.S. consumer goods not to be targeted by the tariffs are now gearing up for the next fight -- to try to stave off 25% tariffs on an additional $325 billion of imports from China. Companies including Nike, Under Armour, Apple, Walmart and Target would feel the effects of these additional tariffs, and they are deploying lobbying power in Washington.
Jodi Schneider  Senior International Editor

05/10 02:31 ET
To add to that, the same industry group also warned that President Trump’s higher tariffs on Chinese imports will worsen prospects for American farmers and others already reeling from lower commodity prices.

According to Kip Eideberg, vice president of government affairs for the Association of Equipment Manufacturers, which represents more than 1,000 U.S. makers of farm, construction and mining machinery, the tariffs will:
“drive down exports, and suppress job gains for the industry by as much as 400,000 over 10 years. It will also invite China to hit back at American businesses, farmers, communities, and families.”
Brendan Murray  Economy Editor

05/10 02:29 ET
More from USA Inc. Here's the industry group for equipment manufacturers who are warning of "dire consequences" and suppress jobs gains by 400,000:
Enda Curran  Chief Asia Economics Correspondent

05/10 02:27 ET
Yuan Extends Gain to 0.34%, Trades at 6.8022
Colin Keatinge  TOPLive Editor

05/10 02:26 ET
Shanghai Composite and Chinext Gauges Extend Gains
China's stock are extending gains:
  • Chinext Gauge Extends Gain to 4%
  • Shanghai Composite Index Extends Gain to 3%
Colin Keatinge  TOPLive Editor

05/10 02:26 ET
Another wrinkle from that Goldman note. Because goods already enroute to the U.S. will be grandfathered in at the 10% tariff, only those shipments leaving from today will hit the 25% level. That leaves a 2-3 week window for more talks.
"This delay might create an unofficial window during which the US and China can continue to negotiate. In a somewhat positive sign, the White House has stated that talks between the US and Chinese delegations will continue today."

Enda Curran  Chief Asia Economics Correspondent

05/10 02:24 ET
And while we're on the theme of trust, a Chinese citizen was yesterday indicted for allegedly aiding a Chinese group in the massive 2015 computer hack of health insurer Anthem, one of the biggest thefts of consumer medical data in U.S. history.
Adrian Kennedy  Senior Editor

05/10 02:22 ET
On top of the China Mobile decision mentioned by Sharon Chen, let's not forget the battle over Huawei. Trump is pushing allies to ban the tech giant from global 5G networks for allegedly being a security risk. He's not having too much success, Todd Shields and Bill Allison reported earlier.
Adrian Kennedy  Senior Editor

05/10 02:20 ET
How did we get here? Despite a December truce that kept the trade war from escalating, the U.S.-China standoff has shaken the world economy and led companies to reconfigure their supply chains. Check out this guide to the dispute from Enda Curran.
How the U.S.-China Trade War Got to This Point: QuickTake
Adrian Kennedy  Senior Editor

05/10 02:18 ET
Goldman places the odds of Trump imposing tariffs on the remaining Chinese goods at about 30%.
"While we believe the White House is not that likely to implement the next round of tariffs (30% probability), we believe the risk has risen somewhat now that this latest round of tariffs has at least technically taken effect."
Enda Curran  Chief Asia Economics Correspondent

05/10 02:16 ET
Some reaction from corporate America now coming in. AmCham China says it's concerned by today's news and hopes the talks continue.
"While we are disappointed that the stakes have been raised, we nevertheless support the ongoing effort by both sides to reach agreement on a strong, enforceable deal that resolves the fundamental, structural issues our members have long faced in China."
Enda Curran  Chief Asia Economics Correspondent

05/10 02:15 ET
Stocks have been pretty volatile today.
``While we believe that a trade deal will eventually be reached between the U.S. and China, the risk of a complete breakdown in trade talks has certainly increased,'' Michael Taylor, a credit strategist at Moody’s Investors Service, wrote in a note. ``Higher tariffs could also lead globally to the repricing of risk assets, tighter financing conditions, and slower growth.''

For our full market wrap:
Adam Haigh  Markets Editor

05/10 02:14 ET
China's Large-Cap SSE 50 Index Extends Gain to 3%
Tony Jordan  Senior Editor

05/10 02:11 ET
And as stocks whipsaw, it's worth noting that the trade dispute isn't the only cloud on Asia's horizon. North Korea is pushing Trump's buttons with ballistic missile tests, so it's not necessarily a great time for the U.S. to further fall out with China.
Sharon Chen  Beijing Bureau Chief

05/10 02:07 ET
As if we needed a reminder that China-U.S. ties are frayed, it's worth noting that China Mobile has just been banned from the American market and earlier approvals for other companies are being reviewed. The U.S. says Chinese companies may be security risks, but some critics see this kind of action as a non-tariff barrier.
Sharon Chen  Beijing Bureau Chief

05/10 01:59 ET
William Hobbs, chief investment officer at Barclays Investment Solutions Ltd., has been telling Bloomberg TV how hard it is at the moment to find value. He reckons markets could get worse from here with tariffs being cranked up, but he, like many investors at present, is holding out hope for a resolution of some kind with more time to negotiate. He says:
"Net-net, we still think a deal will get done of some kind."
Adam Haigh  Markets Editor

05/10 01:45 ET
It has been a wild day for China's stocks -- and the yuan. Shares started higher, went into negative territory, and are now back in the black.
Jeanny Yu  China Markets Reporter

05/10 01:44 ET
CATCHUP: U.S. Slaps a 25% Tariff on About $200 Billion of Chinese Goods; China Says It Will Take `Countermeasures'; Day One of High Level U.S.-China Talks Ended With Little Progress, Negotiations Scheduled to Resume Friday; Financial Markets Have Whipsawed; U.S. Stock Futures, Japanese Equities Drop; China Shares Rebound
Here's a CATCHUP of where we are just now:
  • The U.S. on Friday slapped a 25% tariff on about $200 billion of Chinese goods, up from 10% before, in the Trump administration's biggest protectionist move yet. China said it will take “necessary countermeasures,” though it has yet to specify them.
  • Day one of talks between top Chinese and U.S. economic officials in Washington ended with little progress and a downbeat mood, according to people familiar with the talks
  • Negotiations are scheduled to resume Friday. China said it hopes to resolve differences through negotiation. President Donald Trump Thursday reiterated a threat to impose new 25% tariffs on $325 billion more of imports
  • China’s Foreign Ministry usually has an afternoon press conference, which may afford further comment on the talks
  • Investors are also on lookout for any sign of a call between Trump and President Xi Jinping, after Trump said he’d received a letter from Xi and flagged the potential for a phone conversation between them
  • Financial markets have whipsawed, with bigger than usual trading volumes in Asia. U.S. stock futures and Japanese equities dropped after seeing gains earlier. China’s shares climbed, tumbled and then snapped higher. Global equities remain on course for the worst week since December
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:42 ET
Earlier this week, when the U.S. renewed trade war threats, China announced to lower reserve requirement ratio for smaller locally-focused lenders with funding costs slumping to three-year low two days later. This is widely seen as supportive measures to bolster market sentiment, giving a modest boost to a slowing economy. Investors, however, don't just buy with cheap funding and more easing stimulus are needed to avoid a hard-landing for the world's second-largest economy, especially after trade war escalates.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Ailing Tan  News Data Asia Team Leader

05/10 01:36 ET
That move in the Shanghai Composite reminds me of something similar in dollar-yen trading back when Japan used to intervene regularly in the foreign-exchange market. On one occasion, a very poor American employment report came out. As you would expect, the yen soared against the dollar. But within minutes, the yen plunged back where it had been. No news to drive that move. Observers recognized it must be Japanese intervention. And in time Japanese records (they are quite transparent) showed indeed that was what happened.
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:32 ET
Here's a look at that unusually quick bounce back in Chinese stocks:
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:27 ET
Come to think of it, this could be the biggest U.S. tariff hike in many decades. President Richard Nixon imposed a 10% surcharge on imports in 1971. Trade experts will need to be consulted, but surely this must be one of the largest tariff moves in the post World War II era.
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:22 ET
Good points here on how the rest of Asia will suffer too, from Rajiv Biswas, Asia Pacific chief economist at IHS Markit:
"This large U.S. tariff hike will hit Chinese exporters hard, significantly impacting on their competitiveness against competing products produced in other countries. Such a large tariff hike will also result in significant transmission shocks for other Asian economies, due to the integrated Asian manufacturing supply chain providing raw materials and intermediate goods for China’s manufacturing sector."
Enda Curran  Chief Asia Economics Correspondent

05/10 01:17 ET
I guess Chinese policy makers wouldn't count any state-linked equity purchases as an official "counter-measure" to U.S. tariffs. But it does underscore some of the knock-on effects that the tariffs have. Another question, as Sue Trinh at Royal Bank of Canada alluded to, is what sort of domestic policy stimulus do they roll out to limit the hit?
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:16 ET
Chinese Stocks Rebound
I say "hmm" because that's a big bounce, done very quickly. A reminder, we've seen the "national team" in the market supporting Chinese equities already this week -- see PetroChina from May 6, for example:
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:15 ET
China's currency took a hammering against the dollar this week. That weakness won't be unwelcomed by Beijing, especially given its gains over the past year. The unknown is how far China would allow it to slide. Would they be comfortable with a breach of the 7 handle? It's only another level but crossing it might open a can of worms around capital outflows, instability and Beijing burning through its reserves. Of all the moving pieces to watch, keep a close eye on FX.
Enda Curran  Chief Asia Economics Correspondent

05/10 01:13 ET
Hmmm... Chinese stocks are back up.
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:13 ET
It's not just stocks. Oil has also lost its mojo following the U.S. action.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Adrian Kennedy  Senior Editor

05/10 01:12 ET
More from Trinh:

There are a few things to watch in the immediate term. The first is for China’s retaliatory (and policy) response given they cannot match U.S. tariffs. The second is for whether Trump reiterates his threat to go ahead with preparations to impose 25% tariffs on a further $325 billion in goods from China (i.e. hitting the rest of Chinese exports to the U.S.)
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:12 ET
ANALYSIS: RBC Points Out This Is Biggest Move Yet on Tariff Front
Sue Trinh, head of Asia currency strategy at Royal Bank of Canada, points out that this is actually the biggest move yet on the tariff front.
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:06 ET
A big consideration from today's news is can China's economy endure this tariff hit? The recent story has been one of stabilization, driven mostly by domestic factors and helped by some fairy nuanced stimulus. But Trump's move is material. It will pile pressure on exporters caught up in the tariff net and weigh on investment too. How long before the China watchers start talking about a ramp up in stimulus?
Enda Curran  Chief Asia Economics Correspondent

05/10 01:05 ET
Here's a snapshot of China stocks -- a lot of red just now:
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Colin Keatinge  TOPLive Editor

05/10 01:05 ET
Ah, Chinese stocks now surrender all gains. So indeed, all the green we saw on Asian equities this morning was anomalous. Seemed very odd for investors to be positioning bullish in the run-up to every likelihood of the imposition of tariff hikes.
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 01:04 ET
Shanghai Composite Erases Gain After U.S. Imposes Tariffs
Shanghai Composite Erases Gain After U.S. Imposes Tariffs
Tony Jordan  Senior Editor

05/10 01:04 ET
Today's news is only one part of the global trade war story. I've already explained that Trump could yet target the full gambit of Chinese imports and China could retaliate in kind. But there's also a threat of 25% tariffs on U.S. auto imports from Europe and Japan. Ask any economist and they will tell you: mix auto tariffs and a U.S. and China trade war and you get a game changer for the world economy.
Enda Curran  Chief Asia Economics Correspondent

05/10 01:03 ET
Hang Seng China Gauge Erases Gains After U.S. Tariffs Imposed
Hang Seng China Gauge Erases Gains After U.S. Tariffs Imposed
Tony Jordan  Senior Editor

05/10 01:02 ET
One important market characteristic of this week has been the surge in equity volatility, which suggests the turmoil for traders isn't going to subside anytime soon. The Cboe Volatility Index, known as the VIX, is now at about 19, up almost 50% this week. That's materially higher than its average of 15 over the past five years.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Adam Haigh  Markets Editor

05/10 01:02 ET
Shanghai Composite Index Pares Gain to 0.7%
Tony Jordan  Senior Editor

05/10 00:59 ET
Bloomberg Television is covering every angle of this story -- you can follow on the terminal at {TV }, or see http://Bloomberg.com/tv on the web.

Frank Lavin, former undersecretary for international trade at the U.S. Department of Commerce, and Zhu Ning, deputy director of the National Institute of Financial Research at Tsinghua University in Beijing, have just been talking about the latest tariff development. Click the image below to hear what they had to say on the terminal; or click here to view on the web.
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Kyoji Iwai  Asia-Pacific Multimedia Editor

05/10 00:56 ET
More from Taiwan President Tsai Ing-wen on the impact of the trade spat on the island's economy. The higher tariffs should have little impact as the island's major exporters aren't much affected. But that could change if the U.S. further increases duties, she said.

Tsai, who has been pushing efforts to win more business in Southeast Asia and the rest of the world, said that in the past Taiwan had been over-reliant on China both for production and as a market. Taiwan will try and improve its competitiveness globally.
Adela Lin  Taiwan Breaking News Editor

05/10 00:54 ET
ANALYSIS: Tariffs Announced Today Still Largely Skirt Key Consumer Staples
Worth remembering that the tariffs announced today still largely skirt key consumer staples. The hike targets goods such as lino tiles and wooden furniture and other intermediate goods (I posted on this earlier). Toys, clothes and other staples are still in the clear, at least for now.
Enda Curran  Chief Asia Economics Correspondent

05/10 00:44 ET
Trump yesterday said he may hold a phone call with Xi Jinping, who had sent a letter to the U.S. president about working closely together to ease trade tensions. It's unclear if or when that call may take place.
"He just wrote me a beautiful letter, I just received it, and I’ll probably speak to him by phone but look we have two great alternatives, our country is doing fantastically well,”
Trump said.
"Our alternative is an excellent one, it’s an alternative I’ve spoken about for years. We’ve taken well over $100 billion from China in a year."
Sharon Chen  Beijing Bureau Chief

05/10 00:42 ET
One thought: the Ministry of Commerce statement referred to "necessary counter-measures."

Pure speculation, but that could include help for Chinese companies affected by the tariffs. In other words, the language -- at least in English -- isn't limited to actions against the U.S. China has indeed extended help to domestic entities. That could be less damaging than outright, tit-for-tat tariff increases on U.S. exports. But we'll just have to see.
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 00:41 ET
An interesting description by a Sydney-based market commentator of the escalating tensions and associated market volatility this week:
"They’re like kids,"
said Nick Twidale, chief operating officer of Rakuten Securities Australia Pty in Sydney, of China and the U.S.
"You take your eyes off them because they’ve been playing so nicely, then suddenly turn around to find that one has gone to fetch his baseball bat because he found the other one copying his homework."
Matthew Burgess  Reporter, Sydney

05/10 00:41 ET
Oxford Economics tallies the cost of the now-official latest round of tariffs in a research note:

The Trump administration’s tariff hike to 25% on half of U.S. imports from China will cost the U.S. economy $29 billion by 2020, or 0.3% of GDP. The cost to the global economy will surpass $105 billion.
Michelle Jamrisko  Economy/Government Reporter

05/10 00:38 ET
Let's see how Chinese stocks do after they come back from the lunch break at the top of the hour. Hard to see them staying up 1.5%.
Chris Anstey  Managing Editor, Asia Cross-Asset Markets

05/10 00:33 ET
Former U.S. Negotiator Warns About `Second Order' Effect of Tariffs
Frank Lavin, the former U.S. negotiator warns about the ``second order'' effect of tariffs, in other words the secondary hit to economies via weaker sentiment, slower investment and disruption to supply chains. That's a key worry for economists.
``The second order effect may be more punitive than the tariffs themselves.''
Enda Curran  Chief Asia Economics Correspondent

05/10 00:32 ET
The American trade ire toward China could re-balance shortly toward some other trading partners, with the impending release of the U.S. Treasury's twice-yearly foreign currency report that my colleagues Saleha Mohsin and Jenny Leonard discuss.

Among other countries that will be under greater scrutiny this time around, Vietnam could be cited with the rare and dreaded ``currency manipulator'' tag. Vietnam violates all three criteria for the label, one of which is having a ``significant'' ($20B+) goods trade surplus with the U.S.:
TOPLive Starts: Follow Developments in U.S.-China Tariffs Spat
Michelle Jamrisko  Economy/Government Reporter

05/10 00:31 ET
For the record, this came from China's commerce ministry almost
immediately after the U.S. hiked tariffs:
"China deeply regrets (U.S. tariff increases) and will be
forced to take necessary countermeasures. The 11th round of China-U.S. high-level economic and trade talks are underway, China hopes that the U.S. could work together with China and resolve existing issues through cooperation and negotiation."
Zhe Huang  Senior Editor

©2019 Bloomberg L.P.