Gloom and doom trade war update

Here is everything you need to know today from the front lines of the U.S.-China trade war:

• Starting on July 6, U.S. soybean imports into China will have a 25 percent tariff, but there may not be enough soy elsewhere in the world for China to avoid using American beans, according to CNBC. China may also have no alternative to American liquefied natural gas (LNG).
• Shifting production? “A group of senior Thai politicians and businessmen are meeting in China with Foxconn, the world’s largest contract electronics maker, and other companies to seek investment in Thailand,” reports the South China Morning Post.
• Another signal: India’s Economic Times reports that “Apple has started commercial production of the iPhone 6s in India.” Last year in May, Apple began making the iPhone SE in India. The ostensible reason for manufacturing in India is to lower costs. “And — maybe not coincidentally — ” as Jamestown Foundation China Brief editor Matt Schrader tweeted, “diversify their assembly base away from China, and away from Foxconn.”
• The world’s stock markets are generally down, but it depends on what time of day you check. This morning, the Financial Times ran the headline Markets rally as Trump softens China trade stance (paywall). But just last night, the FT said that China’s bear market was spooking European stocks (paywall).
• Trump’s softening was this: “President Trump said his administration will take a more moderate approach to limit Chinese investment in the United States, rejecting more aggressive restrictions that would have imposed new curbs on Beijing,” per the New York Times (paywall).
• Meanwhile, “China’s central bank guided the yuan to a six-month low against the U.S. dollar on Wednesday, sending the Chinese currency tumbling once trading began minutes later,” reports the Wall Street Journal (paywall).
• The tumble in the yuan “blindsided currency forecasters” and “is now triggering warnings of potential contagion,” according to Bloomberg.
• Financial panic? In a separate report, Bloomberg says that a “leaked report from a Chinese government-backed think tank has warned of a potential ‘financial panic’ in the world’s second-largest economy, a sign that some members of the nation’s policy elite are growing concerned as market turbulence and trade tensions increase.”

Previously in The China Project’s trade war coverage:

Xi Jinping takes up Trump’s challenge to a trade duel