Last Friday, when the word was wondering why China "responded" with just $3 billion in US tariffs to the proposed 60 billion in "Section 301" duties to be levied by the Trump administration on China, it was Hu Xijin, the editor-in-chief of China's state-owned nationalist tack-on of the People's Daily, Global Times, who explained that the $3 billion in tariffs targeting 128, mostly agricultural products, was in response for the formerly revealed "Section 232" steel and aluminum tariffs which, while exempting much of the world, clearly had China in their crosshairs.
I learned that Chinese govt is determined to strike back. Friday's plan to impose $3b tariffs is to retaliate tariffs on steel and aluminum products. China's retaliation lists against the 301 investigation will target US products worth $ tens of billions. It is in the making.— Hu Xijin 胡锡进 (@HuXijin_GT) March 23, 2018
Fast forward to today, when the otherwise unassuming twitter account of the Global Times editor in chief was once again the focus on global macro traders, when shortly before 9am ET, he wrote that as far as he knows, "the US will release a list of products that it will impose higher tariffs based on 301 investigation in a few hours. China will put forward its retaliation list later, but the list will definitely come out. The US had better not think China will back off."
As far as I know the US will release a list of products that it will impose higher tariffs based on 301 investigation in a few hours. China will put forward its retaliation list later, but the list will definitely come out. The US had better not think China will back off.— Hu Xijin 胡锡进 (@HuXijin_GT) March 27, 2018
So is this return of last week's angry tone out of China an indication that yesterday's "trade war truce" rally was built on quicksand, and that once the US reveals the details of its second round in Chinese tariffs, Beijing will respond immediately. Or is this just the editor of China's main US-facing propaganda outlet seeking to drum up page views and clicks?
For the answer, keep an eye on what the US commerce department does in the next few hours, and whether Hu is proven right on the immediate release, which would suggest that with an imminent Chinese response to this latest trade war shot, it is only a matter of time before market's fade the entire Monday surge.