[Salon] What you should know today

[Chas Freeman <cwfresidence@gmail.com>]

The Wall Street Journal

Good afternoon. Here’s what you should know today, April 6:

The U.S. and China appear headed for a long cycle of tit-for-tat retaliation
The economic outlook quickly sours
Americans are sitting on a cash pile

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PHOTO: KEVIN FRAYER/GETTY IMAGES

1. China wanted to negotiate with Trump. Instead, it’s preparing for
another trade war.

Beijing had been cautiously optimistic in the Trump administration’s
first days, but with the latest tariff action, its hope for dialogue
has been dashed. The lack of communication between the two sides shows
no signs of letting up. What lies ahead is likely to be a cycle of
tariff retaliation, making it hard to even start negotiations (🔐read
for free) in the near term.

2. Nations are strategizing as increased Trump tariffs loom.

Governments worldwide are assessing the impact of 10% tariffs on just
about everything the U.S. imports, which took effect Saturday. Some
countries are bracing for higher tariff rates scheduled to take effect
this week. Their responses so far have varied. Indonesia and Taiwan
are among those planning to forgo retaliation, while China is
signaling a more combative approach. Israeli Prime Minister Benjamin
Netanyahu, who’s traveling to Washington today, is set to be the first
world leader to hold in-person talks with Trump about the tariffs.

3. The economic outlook has quickly shifted from solid growth to recession risk.

The stock market went off a cliff after President Trump announced the
highest tariffs in more than a century. Whether the real economy will
follow is impossible to know, but the risks are tilting in that
direction. In a note titled “There Will Be Blood,” a JPMorgan
economist raised the probability of a global recession to 60% from
40%.

4. Investors are losing their stomach for “buying the dip.”

Rather than scooping up shares trading at cheaper prices, many
investors are opting to keep their cash on hand. Investors poured more
than $60 billion into money-market funds in the first few days of
April. That has sent assets in such funds to a record $7.4 trillion as
of Thursday, according to Crane Data going back to 1972.