Escalations in the trade war. U.S. President Donald Trump was not happy about the new retaliatory tariffs that China imposed yesterday. Shortly after Beijing’s announcement, U.S. Federal Reserve Chairman Jerome Powell, speaking at the annual Fed retreat in Jackson Hole, Wyoming, demurred on the timing and size of possible future interest rate cuts and noted that the trade war has given the central bank limited room to maneuver. In response, Trump took to Twitter to express his displeasure with Powell and “hereby order” U.S. firms in China to begin looking for alternatives, sending U.S. markets into a tailspin. The president has no power to order private U.S. businesses to do anything of the sort. But he does have the power to intensify pressure on China. After U.S. markets closed, Trump announced tariff increases on a whopping $550 billion worth of Chinese goods. According to the U.S. Trade Representative, the 25 percent duties currently in place on $250 billion in Chinese imports will increase to 30 percent on Oct. 1. The new 10 percent tariffs on another $300 billion in Chinese imports, including consumer goods, will jump to 15 percent when implemented in two batches, one on Sept. 1 and one on Dec. 15, the latter of which is intended to give U.S. retailers time to stock up ahead of the Christmas shopping season.

Japan-U.S. While all this was unfolding, visiting Japanese Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer apparently found enough time to reach, in principle, a “mini trade deal.” According to Kyodo and the Nikkei Asian Review, Tokyo has agreed to lower tariffs on U.S. beef and pork (though not farm products) to levels the U.S. would have enjoyed had it remained in the Trans-Pacific Partnership. This is something of a concession for both sides. Tokyo initially wanted to keep incentives in place for the U.S. to one day rejoin the trade bloc it once championed, and so was reluctant to lower tariffs on U.S. goods to levels given to members of the rechristened Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Washington, for its part, had demanded even lower tariffs. But with U.S. farmers getting slammed by the U.S.-China trade war, it makes sense that the White House quickly settled for less here. In exchange, Washington will refrain from hiking tariffs on Japanese automobiles. Whether or not this is guaranteed won’t be clear until the full text of the deal is completed and released. It’s also unclear if the deal will be comprehensive enough to avoid running afoul of World Trade Organization rules, which Tokyo is keen to uphold, or include enough concrete U.S. concessions to make ratification by the Japanese parliament possible.

Meanwhile, in the tech war … We still don’t expect U.S. tariffs to hurt China enough to push Beijing toward sweeping trade concessions anytime soon. But Chinese telecommunications giant Huawei is certainly feeling the pressure of the United States’ parallel moves to starve parts of the Chinese tech sector, which Washington considers a threat to U.S. national security, of U.S.-made components and intellectual property like semiconductors that can’t easily be sourced elsewhere. On Friday, Huawei executives said that the 90-day reprieve from a ban on sales to the company granted by the Trump administration last week is “meaningless,” and admitted that it expects revenues from its consumer business to plunge by at least $10 billion this year, with company-wide revenues falling at least $30 billion short of their target. One Huawei executive also said that the company’s new Harmony operating system isn’t yet viable as an alternative to Google’s Android – a system Huawei is likely to lose access to under the new U.S. export controls. Some good news for the company: On Thursday, it unveiled what is considered to be among the world’s most powerful artificial intelligence chipsets. Huawei’s success in weaning itself off foreign AI technology doesn’t reduce its dependence on advanced U.S. microchips needed for things like 5G infrastructure. The U.S. still has a lot of leverage in this area. But it is a reminder that the company’s ability to make breakthroughs elsewhere shouldn’t be underestimated. This will likely deepen Washington’s sense of urgency to strike Chinese tech firms before it’s too late.

Missiles for everyone. North Korea, Russia and Iran have all conducted more missile tests. The two missiles launched by Pyongyang into the Sea of Japan appear to be the same short-range variety that the it tested repeatedly this summer – intended, in part, to deepen wedges between Seoul, Tokyo and Washington. Russia’s missile test, meanwhile, was reportedly a liquid-fueled inter-continental ballistic missile launched from a submarine in the Barents Sea, no doubt a response to the U.S.’ Monday test of a cruise missile previously banned by the newly defunct Intermediate-Range Nuclear Forces Treaty. It’s unclear at this point what Iran tested; Islamic Revolutionary Guard Corps chief Hossein Salami declined to provide any details. But on Thursday, Tehran showed off what it claims is a domestically built long-range, surface-to-air missile defense system.

Honorable Mentions