Donald Trump, in his recent tweets, sent a blow throughout the trade market. He taunted China on Wednesday, saying he was prepared to keep tariffs on Chinese goods in place. Trump is now putting his deal-making facade on the line and raising new risk into his aim for another four years in the White House.
Washington: Who would’ve thought that all it required was 2 tweets to change the market upside down. After weeks of warnings from many on Wall Street, the American president’s threat to boost tariffs on China trembled the market and its figures.
….Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers…great for U.S., not good for China!
— Donald J. Trump (@realDonaldTrump) May 8, 2019
S&P 500 Index futures slid 1.5% and the Shanghai Composite fell 5.6%, the most since February 2016. European shares also dropped. Declines in equities could raise yet a further sell-off, thanks to the role of quantitative players.
The efforts to bring the talks with China to an end comes as Trump’s administration gets ready for a tough fight in Congress over its new North American trade deal.
Trade fears sent US markets sharply down, amid rising concerns about the China talks resuming.
China has recently been suffering a lot of blows in the area of trade. The manufacturing giant is speculated to be left behind by India. This comes as it races to become the manufacturing centre for many US-based companies.
A trade war in making?
China reportedly considered cancelling the talks that were scheduled in Washington. Though the Foreign Ministry said that negotiators were indeed preparing to visit the US for the meetings. Meanwhile, a media blackout on Trump’s threat left investors confused.
The key is whether the tweets prove to be an epic incidence of poker playing or “a raging miscalculation with vigilante markets,”.
A quick resolution now seems distant. Unmet demands still remain between the two sides. Moreover, Trump suggested he is ready to impose higher tariffs on $200 billion worth of Chinese goods on Friday morning.
Decisions from the Business mind-turned-President does not look good for China and for the market, who knows what’s yet to come.