The U.S. Trade Representatives office on Monday launched a 25% tariff increase on about $300 billion of Chinese goods, which will cover almost all Chinese imports to the United States that have not yet been taxed.
China announced its decision to raise tariffs on $60 billion of U.S. goods Monday morning in the United States. Despite the announcement of the new U.S. tax increase list after the closing of the stock market in the afternoon of U.S. time, U.S. stocks on Monday recorded their biggest one-day decline this year, with Dow Jones and S&P down 2.4% and Nasdaq down 3.4%. Chinas retaliatory measures are enough to shake the U.S. market.
It is worth noting that the Chinese stock market also fell on Tuesday, but the decline was very small, with the Shanghai stock market falling by only 0.69%, much less than the decline of the American stock market. Generally speaking, the negative news is the same, and the U.S. stock market has fallen heavily before, and the Chinese stock market is likely to fall even harder.
Its hard to say what the future will be like, but according to the information about the escalation of the Sino-US trade war on Monday night Beijing time, the reaction of the Chinese market is lighter than that of the American market, which indicates that at least at this point, the Chinese market has more psychological adaptability to the trade war.
One important reason is that the Chinese government has not concealed the difficulties of the Sino-US trade negotiations. Even when the progress of the previous period was relatively smooth, the official statements did not go beyond the scope of cautious optimism. Moreover, the trade war will do some harm to Chinas economy, and the government is blunt. Chinas stock market suffered a setback on Trump Twitter last Monday. It was only a reaction to the anticipated reversal of the negotiations. Other information related to the stock market did not change much.
The United States is different. The White House has been indoctrinating American society with the idea that its economy is so strong that it will not be affected by the trade war at all. It has even advocated that the tariff war has a direct impact on the American economy. In addition, the White House also advocated that the United States could overwhelm China with a tariff war, and that China would quickly yield because it could not withstand tremendous pressure. In a word, the U.S. government is misleading its people.
Yet China has not yielded. Not only did Chinas retaliatory tariff measures come back forcefully on Monday, but there was no sign that China was shaking a gun and would soon compromise across the board. The scale of Chinas counterattack is not as large as that of the United States, but its precision is high and its sustainability is not at all exhaustive.
Washingtons first lie, that the United States can quickly subdue China after exerting all the pressure, has gone bankrupt. The second lie is that the trade war has no impact on the U.S. economy and has a positive impact. It is rapidly becoming riddled with holes. The decline in the performance of big American companies such as Apple is related to the trade war. Farmers are becoming more and more impatient. Boeings short-and medium-term prospects are bleak because of the Aeronautic Airlines incident and the uncertainty of the trade war. Stock market shocks are increasingly linked to the negative news of the trade war.
All this makes the U.S. market more volatile than the Chinese market, and the White House promises investors that many governments have no resources to ensure that they deliver. It is trying to trick American investors into building a dangerous building for the prosperity of the American stock market, which needs Chinas key cooperation. Then it puts the dangerous building in the American economic complex and threatens China with their false skyline.
This set in Washington cant be played. It may be broken at some point in the chain. There are many bubbles in the US trade war. With the increasing trade war between China and the United States, at least part of them will be speeded up. American investors face higher risks than investors in other countries in the world. Thats the truth of the matter.
China did not take the initiative to smash the U.S. stock market. It was the U.S. that crashed into Chinas tough body and bones with its highly sensitive market. There are still many of Chinas future successor waiting to see the US economic bubble burst in the collision.
Source: Global Times - Global Network. More exciting, please log on to the World Wide Web http://www.huanqiu.com responsible editor: Li Wan_B11284