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Recently, the thunder and the international trade have started to waver.
Global investors have experienced a moment of shock. On the second day after the Fed cut interest rates by 25 basis points, the US stocks that had risen well, suddenly a big news, directly crashed and dipped, and plummeted directly after rising above 300 points.
Not only that, A50 futures also plummeted nearly 3%, the offshore RMB exchange rate plummeted more than 500 points, approaching the 6.96 mark, hitting a huge decline on May 13, approaching the important psychological barrier of "7".
All this, only because Trump spoke again.
Let's see what happened.
In the US stock market, Trump issued a message through social media, saying that from September 1st, the remaining $300 billion worth of Chinese goods will be subject to a 10% tariff, which does not include the levy of $250 billion on Chinese goods. % tariff.
Trump released Twitter: "Trade negotiations are still going on, but the US will impose a 10% micro-tariff on the remaining $300 billion of Chinese goods starting September 1. This does not include the 25% tariff already imposed. 250 billion US dollars of Chinese goods... We look forward to continuing an active dialogue with China on a comprehensive trade agreement. I believe the future between China and the United States is very bright!"
The Fed cut interest rates to stop shrinking, Trump ammunition is full
On July 30, the Fed announced that it would cut the federal funds rate target range by 25 basis points to 2% to 2.25%. After the Federal Reserve concluded its monetary policy meeting on the same day, it issued a statement saying that it will end its balance sheet reduction plan on August 1. Two months ahead of the previous plan.
Federal Reserve Chairman Powell said that the Fed’s interest rate cut is a policy adjustment during the interest rate hike cycle and does not represent the beginning of a long series of interest rate cuts.
This is exactly what gave Trump a renewed trade war with China and provided weapons and ammunition.
Kill one thousand, and damage eight hundred. There is no doubt that Trump’s trade war with China is also a huge loss to the United States itself while damaging the Chinese economy. When the war between the two countries can stop depends on the enthusiasm behind the two sides, the ammunition in the hands, that is, the economic situation.
As the US economic helm, independent of the US president's authority, the Fed has been confronting Trump. In 2018, it has raised interest rates four times and started to tighten the money. This is a constraint on the Trump trade war. The negative impact of the US economy.
However, on July 30, under the enormous pressure of Trump's possible replacement of the Fed chairman, the Fed made a decision to cut interest rates and stop shrinking. This is a powerful plan to inject capital into the US economy and stimulate the economy.
The market is also very strong. In the face of the Fed’s first interest rate cut since December 2008, the US dollar index has risen sharply and once rushed to 98.9418.
Although it still hasn't reached Trump's goal of 50 basis points for interest rate cuts, it is already a very heavy ammunition. Trump is really non-stop, immediately declares war on China again, and the remaining 300 billion worth of trade between China and the United States. All goods are subject to tariffs.
After a short break between the two sides, a new round of war officially announced!
Which industry will be affected?
According to the taxation list published by the US Department of Commerce, the electronics industry such as mobile phones and computers were the most affected, followed by clothing, toys and footwear.
Future impact geometry?
In the next two decades, China will face the suppression of the entire Western World Alliance, the United States will be tougher, Europe and Japan will ease some, but suppression will be the main theme.
The containment of the United States is not to rely on China’s trade concessions, not to rely on China to move closer to the United States, and not to completely resolve the economic system according to the requirements of the United States. At this point, the Chinese must be fully psychologically prepared.
There are three conditions for China to win the Sino-US dispute: 1. Maintain unity and unity within China, 2. Unite international forces that can unite, break the Western Union’s suppression of China; 3. Further intensify internal economic contradictions and economic stagnation in the United States .
The rest is waiting, hehe. See who can bear, who can swear. Both countries have great structural problems. The outcome of the dispute between the two countries is within their own. Who can reform and progress to solve their own problems? Who is the winner? The problem in the United States is actually more difficult to resolve than China.
The last sentence,
Confidence in China comes from confidence in the Chinese. A Chinese is no worse than an American. A Chinese can fully create one-third to one-half of the per capita GDP of an American. China’s economic aggregate must exceed that of the United States!
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