(Bloomberg) -- It’s been 24 hours of pain that changes a lot about the global economic outlook.
President Donald Trump’s threat Thursday to put 10% tariffs on the remaining $300 billion of Chinese imports that aren’t subject to his existing levies sent markets tumbling from Asia to Europe and early in the U.S. on Friday. The new tax would hit American consumers, and businesses are going to face even more supply disruptions. China has already vowed to retaliate if Trump follows through.
Bloomberg Economics’ initial estimate of the additional costs of U.S. tariffs and Chinese retaliation sees both economies taking a 0.2% hit to GDP by 2021.
Meanwhile, a simmering trade fight between Japan and South Korea is boiling over, putting the health of two Asian export powers at stake. In Europe, concerns are mounting for a hard U.K. exit from the European Union.
Here are the big developments of the past 24 hours:
- China promised to retaliate against “blackmailing” if Trump goes ahead with more tariffs.
- Trump’s growing impatience risk denting American consumers’ wallets to break the deadlock.
- The slowing global economy faces a stronger headwind, challenging central bankers to respond.
- From slapping on more tariffs to shunning U.S. soybeans, here are ways Beijing could retaliate.
- Goldman Sachs (NYSE:GS) sees a greater chance the Federal Reserve will lower interest rates next month.
- Consumer goods are the targets in the latest tariff barrage, with Apple (NASDAQ:AAPL) among the most exposed.
- China has a heavy arsenal of monetary and fiscal policy to counter the damage from new tariffs.
- Bloomberg’s Trade Tracker index got another nudge down after an ugly month for U.S. exports.
- Japan and Korea swapped export control measures, risking chaos in tech supply lines globally.
Bad news for U.S. farmers: China has already started sourcing agricultural products from other countries and temporary measures like this can end up sticking.
Coming Up
- Aug. 7: France trade balance
- Aug. 8: China trade balance
- Aug. 9: Germany trade balance