U.S.-China Trade War Snowballs Toward Worst-Case Scenario

Most investors are becoming used to the idea that relations between the world's 2 largest economies are likely to become more fraught before they improve

14.8.2019

Most investors are becoming used to the idea that relations between the world's 2 largest economies are likely to become more fraught before they improve

Despite the stock market's sudden rally Tuesday on news the United States would delay implenting its promised tariffs on Chinese goods, most investors are becoming used to the idea that relations between the world's two largest economies are likely to become more fraught before they improve.

I've covered economics, markets and the Federal Reserve since 2001. Share to facebook Share to twitter Share to linkedin Chinese Vice Premier Liu He, right, gestures as U.S. Treasury Secretary Steven Mnuchin, center, chats with his Trade Representative Robert Lighthizer, left, before they proceed to their meeting at the Diaoyutai State Guesthouse in Beijing. President Donald Trump turned up the pressure on China on Sunday, May 5, threatening to hike tariffs on $200 billion worth of Chinese goods.(AP Photo/Andy Wong, Pool, File) ASSOCIATED PRESS There is a good reason Wall Street is on edge these days: the U.S.-China trade war, already a major cloud hanging over the world economy, has just taken a considerable turn for the worst. Despite the stock market's sudden rally Tuesday on news the United States would s on Chinese goods, most investors are becoming used to the idea that relations between the world's two largest economies are likely to become more fraught before they improve. After all, a Trump tweet could derail the market-friendly directive at any moment. In the most recent ratcheting up of tensions, the Trump administration responded to China's latest devaluation of the yuan by labeling the country a currency manipulator. Trump promised he would do so on the first day of his administration but then waited 2-1/2 years to execute — glaring conflicts of interest with his own businesses. Rather than building a united global front against China's aggressive trading practices, Trump proceeded to alienate just about every U.S. ally before turning to China, all alone. That was bound to end badly, and it has. "The move is likely to lead to a hardening in the trade dispute between the countries, and slower expansion in both economies," said Moody's Investor Service in a new report. "While the currency manipulator designation is unlikely to have a material impact on China's foreign exchange policy, we expect that the positions of both countries on the trade dispute will harden," Moody's adds."More broadly, worsening trade and currency tensions between the US and China will curb global growth." Moody's said the risk of an ongoing tit-for-tat has spiked, posing risk to the firm's 2020 forecasts for 6% growth in China and 1.7% growth in the United States. Having devised three likely outcomes from recent trade tensions and negotiations (as describe in the chart below), Moody's believes"the latest development makes the hardened stance scenario more likely to materialize. Under this scenario, we expect that the impact on economic activity would be material, shaving an additional 0.3 percentage point from US growth and 0.5 percentage point from China's growth over a year through direct channels." Where is the trade war headed? Moody's Investors Service That's not to mention the likely market swings that would take the legs right out from under this fleeting little rally. "Such an escalation would increase risk aversion and could lead to an abrupt repricing of risk assets globally. Tighter financial conditions, notwithstanding the Federal Reserve's , would drag global growth significantly lower," the report warned. "Spillovers on investment and through the global production chain would be much larger." Pedro Nicolaci da Costa is Communications Director at the Economic Policy Institute. He was previously a journalist and has been writing about economics and financial m ... Read more: Forbes

Interesting China sucks. Let's move on without them.

U.S.-China Trade War Snowballs Toward Worst-Case ScenarioDespite the stock market's sudden rally Tuesday on news the United States would delay implenting its promised tariffs on Chinese goods, most investors are becoming used to the idea that relations between the world's two largest economies are likely to become more fraught before they improve. Investor Someone doesn't know what to do when they hear 'Simon says, show me your fingers'. Awkward.... lstewart747 What do you expect when you have the worst case scenario in the WH?

U.S.-China Trade War Snowballs Toward Worst-Case ScenarioDespite the stock market's sudden rally Tuesday on news the United States would delay implenting its promised tariffs on Chinese goods, most investors are becoming used to the idea that relations between the world's two largest economies are likely to become more fraught before they improve. China cannot put people out of work and show Hong Kong is right. They will do everything they can to eat the tariffs, maintain production. Trump is doing the usual take a little, give a little. No excitement until 2021. unless China collapses. Move the Supply Chain. Hiii

U.S.-China Trade War Snowballs Toward Worst-Case ScenarioDespite the stock market's sudden rally Tuesday on news the United States would delay implenting its promised tariffs on Chinese goods, most investors are becoming used to the idea that relations between the world's two largest economies are likely to become more fraught before they improve. Tariffs China

U.S.-China trade war hinges on farmers, not AppleThe Trump administration is delaying import tariffs on some electronics, giving the iPhone maker and the S&P 500 a boost. That’s down to business lobbying and a little pragmatism. But the president wants to boost American agriculture. Until China helps, investors can’t rest easy. ReutersBiz GinaChon Already too late for many farmers. Many have already lost everything & filed bankruptcy ReutersBiz GinaChon It will be hard on them....but as our economy is very strong, now is the time to make them stop. It has had a dramatic effect on China and they are hanging on hoping Trump will lose 2020. They will have a surprise.

Australian wool prices a casualty in U.S.-China trade warWool prices in the world's dominant exporter, Australia, are plunging after... Boycott wool. Australian sheep farmer's are horrific in their treatment of sheep. Their shearing often leaves animals with gaping wounds. Their export conditions are even worse. It seems that the trade war has nothing to do with France? Should the muslims cut their throats already?

Trump will have a harder time turning things around as the China trade war drags onNo president wants to face voters in an economic downtown. But if that were Trump's only concern, he never would have pursued his haphazard trade policy in the first place, John Harwood writes. Trump's ridiculous policies have caused a great economy to collapse.. MAGA 🤡 show Presstitute Fredos paid for by China lobby?



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