Analysis: Trump's threat to "significantly increase" tariffs on China is just a bargaining chip, and another "trade agreement" is expected to be reached soon
BlockBeats News, October 12, The Kobeissi Letter released its latest market analysis stating, "The news about China's rare earth export controls was actually released at around 8:30 AM Eastern Time on October 9, which was 26 hours earlier than Trump's post. In other words, this was originally a 'non-news event'—until Trump posted a comment more than a day later.
Last night, China issued a statement clarifying its 'export control' policy on rare earths. The statement said: the new control measures are not a comprehensive export ban, and applications that 'meet the requirements' will still be approved. During last Friday's market downturn, our view was: Trump's threat to 'substantially increase' tariffs on China was just a bargaining chip.
After China's clarification, we believe the likelihood of Trump actually implementing a 'substantial increase' in tariffs on China is extremely low. At present, it appears that the largest crypto liquidation in history, as well as the evaporation of $2.5 trillion in S&P 500 market value, both seem to have stemmed from a huge misunderstanding. We expect that another 'trade agreement' will soon be reached."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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