Trade War Escalates Stoking Wall Street's Fears

859 0 0 0 0 0 (0)


Trump is at it again, with a fresh round of tariffs on Chinese products totaling $20 billion U.S. dollars. Wall Street immediately took notice and investors began to panic sending the DJIA down 150 points in the blink of an eye. It isn't just the U.S. stock market experiencing trading woes either, Canada and China's markets also greatly suffered. This comes on the heels of Trump's arrival at the NATO summit where he immediately began to deride allies and accuse Germany of being owned by Russia. After he leaves the NATO summit he will fly to Moscow, Russia to meet with Vladimir Putin in a closed-door meeting, that is definitely not shady at all. Needless to say, there is a little bit of chaos right now. Anyway... back to China.

"Firm and Forceful"

It's difficult to say what China's next move will be. China's Ministry of Commerce stated that they would act with "necessary counter-measures" without going into any specifics. At the moment all we have is speculation. The fact of the matter is that China can't directly match import tariffs because they simply don't import that much from the U.S.with the U.S. holding a near $350 billion USD trade deficit with China. At this point, experts are saying China might have had enough and be forced to back down. However, I find a couple of glaring problems with this analysis. First, it vastly underestimates China's economic power, and secondly, China might not have to do anything at all to retaliate

There was a trend for a few years where U.S. companies started to shift their production from China back to U.S. soil. Beginning in 2017 that trend began to reverse largely in automakers with Ford (NYSE:F) being one of the first to announce a factory move. Recently BMW (ETR:BMW), Harley-Davidson (NYSE:HOG), and some others have announced they are moving factories and production to China and other parts of Asia citing Donald Trump's tariffs as a direct cause.

If China just continues trade as usual with the rest of the world this trend may accelerate, after all the ones paying tariffs on imports are the countries that imposed the tariffs. China's retaliatory moves could only be just enough to provoke trump into taxing the U.S. further out of world trade as he lashes out at traditional partners. This may seem far-fetched to you but it wouldn't be hard to use the current situation to disrupt U.S. Industries and markets while minimizing their own collateral damage, or even enhancing their economic standing in the world.

Whatever China does they vowed "firm and forceful measures" on Trump's tariffs. As far as the market goes volatility is up, way up. It may only be a matter of time before these sharp declines that are becoming more frequent as months go by start to cut through support lines that have held throughout the year so far. Tomorrow is likely to be another bloody day in the market as pressure increases and uncertainty looms in the minds of investors and traders. 

More from Hade Platform:

Sign up HERE for FREE access the world's fastest-growing, most powerful research platform for stocks and cryptocurrency, MatriX!



Disclosure:

I have received no additional compensation other than the Ethereum that Hade Technologies pays to produce Exclusive content

Comments (0)

Recent Updates

  •   
    Mar 6, 2019 11:15 PM

    DENTSPLY SIRONA Inc - Consumables Revenue

  •   
    Mar 6, 2019 11:15 PM

    DENTSPLY SIRONA Inc - Europe Revenue

  •   
    Mar 6, 2019 11:15 PM

    DENTSPLY SIRONA Inc - United States Revenue

  •   
    Mar 6, 2019 11:15 PM

    DENTSPLY SIRONA Inc - Rest of World Revenue

  •   
    Mar 6, 2019 11:15 PM

    DENTSPLY SIRONA Inc - Technologies and Equipment Total Net Sales ex. PM sales Revenue

  •   
    Mar 6, 2019 11:15 PM

    DENTSPLY SIRONA Inc - Technologies and Equipment Revenue