Following the latest dismal ISM data which sent US equity markets tumbling, traders were on the prowl for any hints what the US may do over the next major catalyst in the US trade war: the December 15 deadline for more tariffs.
An answer came moments ago when Commerce Secretary Wilbur Ross told Fox Business Network that President Trump will increase tariffs on China if Washington and Beijing can’t reach a trade agreement by the December 15 deadline.
"Well you have a logical deadline Dec. 15,” Ross told FOX Business' Stuart Varney in an exclusive interview. "If nothing happens between now and then, the president has made quite clear he’ll put the tariffs in – the increased tariffs."
Confirming that this is not just a hollow threat, Ross also explained that raising tariffs on Dec 15. won't "interfere with this year’s Christmas" as retailers have already stocked up, adding that it’s a "really good time if we have to put more tariffs on."
The fact that with exactly two weeks left until the tariff deadline the US is once again warning China that a deal has to be reached is hardly supportive of "optimism", especially one day after China made it clear that it would only agree to a Phase 1 deal if the US agreed to roll back tariffs, something which Navarro would never agree as it would both destroy any leverage the US has over China and would crippled Trump's negotiating credibility.
As a result, stocks which were already near session lows, took another leg lower...
... as did the Chinese yuan which continues to drift ever further away from the "lucky" 7 level.