- The markets chanted after President Donald Trump issued a 90 -day stand In the tariff policy, he put an end to a brutal week in the financial world. There is an intellectual school that the president’s tariff policy has always been a trick to target China and bring international partners closer to the United States, but the idea is complicated because of the fact that global markets have not recovered and a trade war with China waving on the horizon.
Through one post on social media, President Donald Trump reflected the stock market, which was causing him a week ago with the roses garden address.
Through the social truth, Trump announced 90 days stopped To mutual definitions in most countries, with the exception of China. The stock market is torn immediately. the Dao Jones rose 2,962 points, and the S& P 500 9.5 % has gained, and Nasdak The boat was the second best day. Billions of dollars were restored in wealth.
Investors saw that the announcement of Wednesday is a lifeline, while the White House developed it as the next step in a complex plan to counter the malicious influence in China on global trade.
But the idea of the main plan has been severely undermined through a short -term recovery that has been reflected since then a Bond market This indicates an unparalleled level of doubt in the American economy, and public data that fluctuates from Trump. Not only the markets have not been recovered to pre -conflict levels, after a Historical sale Last week, they fell again on Thursday. S&P decreased 300 % and Dow decreased 2 %.
During a weekly tariff system, Trump told other countries not to take revenge. Most of them listen, with the exception of China, which some saw it could be predicted.
“Trump” expects revenge on China. luck. “In fact, this is a feature of the plan, not a mistake. The entire idea was to make China a decline. You can double the tariff on China so that you can, in turn, reduce the definitions of everyone to make it look like you give everyone else preferential treatment, but the punishment for China.”
Treasury Secretary Scott Payett gave a similar argument about Trump’s strategy to reporters on Wednesday. “You may even say that he entered China in a bad situation,” said Pesin with a smile.
While last week, China faced a 125 % high tariff, and later collided by up to 145 %, a residence order was issued in the world. Although it came at the expense of the tremendous financial disorders. There may be any calming impact on Trump’s suspension on Wednesday, and it seems that it may be dissipated on Thursday, as the White House still negotiating more than 70 commercial transactions and has not started a trade war with China.
“The market is trying to put the worst scenario behind us, but the problem is that uncertainty will still be spread,” said DWS. “The markets do not like uncertainty. We got a little certainty yesterday, except that there is a temporary stop and it appears that China is the main fighter in this trade war.”
Geopolitical or presidential instinct?
In fact, the plight of the entire tariff was explained as a geopolitical maneuver to make China overcome its hand in revenge for the initial tariff of the United States, according to investors. luck Talk to. By being the only country that lacks, China will reveal itself as the bad representative of the United States all the time.
This theory will indicate a major plan to isolate China, which ended until it is the only country that spared the comfort of Wednesday. At the same time, the United States is supposed to approach the rest of the world from other countries to Washington’s orbit in the hope of getting rid of continuity.
Trump has undermined the argument of the major plan. On Wednesday, when he was asked how he would define the next steps for his trade policy that moved forward, Trump replied: “Inquiries.”
The White House did not respond to a request for comment.
Since the United States is facing the task of negotiating commercial deals with northern 70 countries, it can enhance its hand with more convenient trade agreements than it was previously.
“These agreements may pay their fruits, as they are of more economic benefit for the United States,” said Catrambone. “We avoid stagnation, and we rebuild our credibility. This is definitely a possible result here. We should not demonstrate as it is.”
Part of the major plan depends on the White House, which is pressing the trading partners of the United States not only to distribute better deals with it, but worse than China, according to Wizman. The United States will work with Europe to reduce value -added tax, or a long -term pet from Trump, or urge Japan and South Korea to eliminate any tariff on American goods, while convincing them at the same time to lift commercial barriers against China.
“It might also be related to the creation of those other countries to raise their definitions against China and become a more self -gained bloc than countries that do not depend on China,” Wizmann said.
Nevertheless, Trump seemed to cool this idea when taking questions in the Oval Office on Wednesday. When asked if the plan is to build an alliance alliance to apply mass pressure on China, Trump replied: “No.”
Indeed, the United States was, in fact, a trade war against the entire world at the same time, a day later when investors realized that it would continue to fight with China. The United States struck China with a tariff of 145 %, and Beijing struck with 84 % of the fees On its own. This fact still means a high tariff for the best manufacturer in the world, which exports about $ 440 billion of goods to the United States
The markets will not fully recover from the United States and the frozen trade, according to Wesman.
He said: “If you have a cold war with China, this still involves an important huge direction,” he said. “It is not a free trade. As far as people link globalization with a better global growth over the past 25 years, I think they still have to reduce their view of growth.”
until Definitions on China Alone is still Pressure margins For companies that export goods from there, they risk consumers higher, and effective curtains are one of the main trade relations of the global economy.
“I don’t know how there will be no strong reaction in America when everything begins to cost more than it may harm the confidence of the consumer again and the markets,” said George Keelas, CEO of PROSPERO.AI retail platform.
The administration may have been ready to overcome the storm in the stock market. When global stocks decreased, the president called the prices of “medicine” and “short -term pain”. BESSENT He said The market was suffering from a “short -term reaction in the market” and Minister of Trade Howard Lottenic He said American markets will perform “very well” in the long run.
Unless the White House is not ready to paint it was The collapse of the bond market. Before Trump entered, the US economy suffered a rare blow from the prices of the treasury and the treasury, which risked a financial financial crisis. Once the returns began in the treasury bonds for 10 and 30 years, within hours of no less than-the alleged short-term pain began to appear longer and more painful.
The bond market was the most prominent place that could see what was equivalent Timing “We have discovered that we were unable to win a trade war against the world,” said Kellas.
The returns have increased in the same stirred shares, which indicate an unprecedented shortage of believing in the American economy. When these two financial events line up, they can advance the worst crisis. Similar dynamics appeared in the sovereign debt crisis in Greece 2010 and in the United States in 1987 on Monday Black.
Believers will say to the Great Plan that this is the moment when you can retreat, vice versa, and stop bleeding before injuring the wound.
“I think someone was walking in the oval office and saying:” See if you will start using the carrot as well as the stick, this may be the time to remove the carrot. “
Of course, the skeptics will say that making a level of doubt in the American economy was not part of the plan. If so, there will be nothing indicating the reckless abandonment instead of the main strategy.
“Trump could have worked that the stagnation of the stock market was not on low bond returns but on higher returns,” said the chief strategic expert at Dhaval Joshi at BCA Research.
Ultimately, the market and the response required Trump. “The Trump administration is not immune to market pain as it has appeared for a period “The pain threshold has just appeared.”
Trump eventually ended that it was the bond market that led to his decision to announce temporary suspension. “I saw last night that people get a little,” Trump said.
He added that he was surprised by the market’s reaction to his decision to stay on customs duties. Trump said about Market ascending. “If you continue to go, you will return to where it was four weeks ago.”
Then he grabbed himself: “But it was a sick market four weeks ago.”
Four weeks ago, S&P 500 and DOW were 7 % higher and 6.5 % higher than today.
This story was originally shown on Fortune.com
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