In a day when weeks of “trade deal” optimism are being systematically unwound by the hour, if not minute, moments ago the Global Times’ Business Source group said that that China will release an “unreliable entity list” soon, which includes relevant US entities. The move is being accelerated up in response to the expected passage of a Xinjiang-related bill by US Congress, that will harm Chinese firms’ interests, “prompting China to speed up the move.”
A subsequent tweet by the Global Times listed the possible retaliatory measures by China, which however once again did not include any direct hurdles to the trade deal. Instead, these were:
- Release unreliable entity list to include relevant firms
- Blacklist relevant US people and firms to restrict their entry to China
- Sanction US politicians behind the bill, like Marco Rubio
Possible retaliatory measures from China once US passes #Xinjiang-related bill:
1. Release unreliable entity list to include relevant firms
2. Blacklist relevant US people and firms to restrict their entry to China
3. Sanction US politicians behind the bill, like @marcorubio https://t.co/Klm0aFfKzF
— Global Times (@globaltimesnews) ٢ ديسمبر ٢٠١٩
While the existence of a “unreliable entities list” is nothing new, and was first reported back in May, the fact that suddenly various adverse developments related to the trade deal appear to be hitting at the same time is spooking markets, with futures slumping back to session lows following the Chinese news.
The Chinese threat comes about two hours after Wilbur Ross said that absent a deal by Dec 15, the US fully expects to hike tariffs on Dec 15, which in turn appears to have prompted a rapid deterioration in diplomacy among the two sides, and judging by the market, it now appears that a tariff delay in two weeks is becoming increasingly improbable.