Posted on 07/18/2018 8:01:42 AM PDT by GonzoII
Don’t look now, but there are numerous signs that President Trump
is winning the trade war with China. While the battle over tariffs and protecting intellectual property may eventually damage the United States’ economy, there are signs that China is already paying a price for its refusal to bend to Trump’s demands.
One indicator of that price is the sharp plunge in China’s stock exchanges. Since the White House announced the first tariffs — on washing machines and solar cells on Jan. 22 — the Shanghai Index of Chinese stocks is down nearly 20 percent, while the S&P 500 is off less than 1 percent.
That decline of share values is occurring in spite of the first-time inclusion in the MSCI, an important international index, of many Chinese stocks on June 1. That initial index listing attracted billions of dollars toward Chinese stocks, in expectation it would boost prices, but it did not.
What does that tell you? Investors think China has more to lose than the U.S. They are correct.
China’s government, determined to save face and match Trump’s tariff threats, is so concerned about the slide in share prices and what it might signal about the cost of the confrontation, that it will likely allow the $941 billion China Investment Corp. (CIC) to begin buying domestic stocks.
The sovereign wealth fund has petitioned to change its mandate, which formerly directed it to purchases of overseas shares; since most view the CIC as an arm of the Chinese government, the move may be interpreted as Beijing again intervening to prop up share prices.
It would not be the first time. From the middle of 2014 through the second quarter of 2015, Beijing encouraged China’s citizens to buy stocks, ballyhooing a booming economy and hinting that the government....
(Excerpt) Read more at thehill.com ...
The goal is a negotiated but very substantial change to China’s trade practices.
But what Trump has done is put Americans, particularly American investors and corporations, the parade to China should end. Message sent loud and clear.
China is going tits-up in the Trade War.
This is the one thing they never planned for, and therefore can’t defeat.
We are in this social, political and economic mess because stupid people made stupid deals and pre-candidate, candidate, President elect and President Trump has repeatedly and consistently said the stupid deals would be negated, vacated or re-negotiated.
THAT'S what he said standing beside Putin, who added ... "Who said we trust each other?"
There is the possibility that China (and other countries) might try to hold out until November 2020. If they can. Perhaps the US will replace Trump with someone "more flexible" after the election.
But if this becomes a waiting game, and if Trump is re-elected in 2020 (he will be) watch countries all around the world suddenly fall in line. An additional 4 years to wait?? Until 2024?? Not a chance.
We are likely to win very soon.
Worst case scenario: we win big in 2020.
The S&P is the only index down so it is the one the Hill quotes.
Great job, Mister President!
...interesting insight..
They have more to lose because America already lost it previously. We want it back!
It’s going to be tough to stay the course with the Dems, the media (including FOX) and republicans that China owns going after him every minute of every day. I have faith in President Trump, but he his going to need us standing strongly behind him.
Oh, nooo! Starting a trade war with China is a very bad thing! The lamestream media told us so!
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