50% on

Daily update

US taxes on Indian imports doubled to 50%. US importers should pay the old tax rate on goods already en route to the US, delaying the effect. With full pass-through and no demand switching, the tax increase would add less than 0.1 percentage point to US consumer price inflation. However, the unpredictability of US trade policy affects global corporations as they manipulate their supply chains.
The Federal Reserve has avoided taking a stance on US President Trump’s attempt to fire Fed Governor Cook, essentially deferring to a court decision. The US yield curve has been steepening with investor concern about the independence of monetary policy, but as yet markets are not pricing a loss of Fed independence.
China’s July industrial profits are still falling, but falling less than in the recent past. Normally, this is not a market focus, but it does suggest that China is not generally engaging in “dumping” exports onto other markets. Trading patterns outside of the US have been disrupted remarkably little.
German consumer sentiment weakened a little. The UK offers a poll of retailers’ sentiment later today. While domestic demand matters to both economies, the relationship between sentiment and reality can be questioned in the world of hashtag economics.