What's going on?

The US president threatened yet another round of American trade taxes on Chinese goods late last week, sending the price of oil plunging and investors clamoring for government bonds.

What does this mean?

The first in-person trade talks since the US�s trade war truce with China last month were swiftly followed by the announcement of a 10% tariff on $300 billion of currently untaxed Chinese products. Unless a trade deal can be agreed by September, virtually all Chinese goods entering America will soon be subject to tariffs.

China has allegedly failed to follow through on commitments to buy more American food and restrict the export of problematic opioids to the US. It responded on Friday by threatening to impose more of its own tariffs on US goods � and, if it exhausts those options, other penalties too. Sound familiar?

Why should I care?

For markets: Bonds up, oil down.
Investors sold stocks and flocked to the perceived safety of government bonds on Friday. US stocks overall had their worst week this year � and US bonds their best since 2014. But the price of a barrel of oil had its worst day in three years following the latest tariff tussle, falling 7%. US demand for oil has been on the decline, and a weaker Chinese economy would leave it needing less of the black stuff too. US oil production, meanwhile, increased 14% in May versus a year ago…

The bigger picture: Red, white, and black.
American oil giants ExxonMobil and Chevron both announced better-than-expected second-quarter earnings on Friday � with the latter churning out the most oil in its 140-year history. Chevron may still be smarting from its recent failed attempt to take over rival Anadarko, but the $740 million payoff it received for its trouble should help soothe any hurt feelings. It�ll also help fund the massive investments both Chevron and ExxonMobil are making in further exploiting the shale oil-rich US Permian Basin. Some, however, worry that an American oil boom may precede an American oil bust. Sound familiar?