It is an unhappy Tuesday for global markets, most of which are down sharply after the announcement late Monday that President Trump directed the US Trade Representative to "identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10%". The announcement did not specify timing but the size of the threatened escalation (if not the timing; yesterday's newsletter said "we may even see a US announcement of the next $100 Billion tariffs imminently") has spooked markets. Trump may see it as another negotiating tactic but the likely outcome keeps getting uglier and uglier as Beijing is unlikely to cave quickly if at all to US pressure.

China's response via a Ministry of Commerce spokesman should send chills down the spine of every US executive with operations in the PRC:

"China will have no choice but to take comprehensive measures combining quantitative and qualitative ones to resolutely strike back"

Those "qualitative" measures may include more inspections, production de…