Trump’s Leverage Over China – The Market

This is the FXI – a basket of big Chinese stocks. This is a 1 year chart. Can you see when Trump started putting tariffs on China? 8-)

China Stocks 10 Oct 2018 1 year

China Stocks 10 Oct 2018 1 year

“Down you got me goin’ goin’ round you got me goin’…”

Any guess how long before the Chinese Central Committee discovers their portfolio isn’t worth so much anymore?

THAT is the leverage Trump has over the Chinese. Without our $1/2 Trillion / year of trade deficit, China has a Huuuuge problem ;-)

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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2 Responses to Trump’s Leverage Over China – The Market

  1. John F. Hultquist says:

    Farm products have been bought by the US Gov to keep those folks happy as Trump’s tariffs were countered by other countries.
    Those goods are (soon) to be released to food banks.
    Those places need extra workers to handle the load.

    You can’t do just one thing.

  2. nshgp says:

    It can work both ways.

    1. Both countries have a massive debt problem.

    China’s is their banking system, where people have loaned trillions. Look at the property market, wasn’t built out of thin air.

    The US debt problem isn’t the borrowing, its the social security debts. 220 trillion on top of the 20 trillion borrowing. That inter generation transfer can’t be paid. IT’s too large.

    2. So who blinks first?

    China? Massive unemployment, people on the street. The last thing the communist party wants. A disaster for them. Can they sell to other countries? Hard.

    The US? No more cheap tee shirts? Well plenty of other countries will make them.

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