today, China Respond to Trump’s tariff By imposing anti -carriers on imports of some American goods.
In particular, it will be imposed 15 % definitions On wheat, corn, cotton and chicken, and 10 % On the chromosome corn, soybeans, pork, beef, seafood, fruits and vegetables coming from US.
These anti -tankers will enter into force on March 10.
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Trump’s tariff and trade war against China
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The person whom Trump started is in all respects a Trade war around the world.
The goal is Reducing the trade deficit of the United States, Given that the country imports much more than it is issued.
The problem is that the World Trade War with customs and anti -tariffs will eventually harm all economies, including the US economy.
In fact, it appears that the real purpose of President Donald Trump is also.
If the goal of reducing the American trade deficit remains, the main path, however, should not be to reduce imports, but to Increased exports.
By itself, import reduction may not be a problem, but if this is achieved by imposing definitions, this will definitely be a problem.
In fact, and gross domestic product At the estimate of Atlanta, the Federal Reserve Bank is estimated that the first quarter of 2025 for the American economy must contract up to 2.8 %, after eleven quarter of the increase in a row.
The hypothesis is that this strategy is just a way to achieve another goal.
The real issue between the United States and China Trump: Definitions as a means
The real basic issue is The exchange rate between the US dollar and the Chinese yuan.
In fact, it seems that China has managed to maintain it artificially low for some time, specifically in order to prefer its own exports.
The fact is that, according to some estimates, China was able to keep it significantly less compared to what could be usually if it is allowed to float freely in the market.
Keep in mind that until April 2022, the exchange rate between the yuan and the dollar was about $ 0.157, while since October 2022 it decreased to less than $ 0.14. Currently, he is in 0.137 dollarsIt is less than 12 % three years ago.
In 2018, it was more than $ 0.16, and in 2014 also above $ 0.166.
Trump does not have the authority to prevent China from maintaining the hue/dollar exchange rate artificially, and therefore it attacks definitions.
Chinese response to Trump’s aggressive policies
Now, and Risposta Cinese For these attacks, the exchange rates are not related, but only Dazi.
In fact, the current yuan/dollar exchange rate is completely in line with its three -month price, and it is still less compared to $ 0.14 before Trump’s electoral victory.
Therefore, on the one hand, we have the United States of America that cannot raise this exchange rate in order to reduce imports from China and perhaps increase exports.
On the other hand, our China does not want to surrender to the war of customs tariffs, at least at the present time, and instead of allowing the yuan an estimate, it prefers to respond to the anti -reporters.
What really leaves it is the fact that the customs tariffs and anti -anti -anti -harbor tend to harm, especially those who impose it, and therefore Trump’s strategy based on customs tariffs destroys the United States of America itself, while China’s response to anti -carriers will likely end with the Asian giant itself.
The dollar index: analysis and performance
Within this bad scenario, however, a possible good signal began to appear.
the The dollar index It is an indicator that measures the direction of the power of the US dollar over time compared to other global currencies, especially the euro and yuan.
The peak of the last times was reached on January 10, when it moved around the sign of 110 points.
On the day of Trump’s inauguration at the White House, January 20, he already decreased to 108, but in reality, this was still a high level. However, it should be noted that for this index, two points of difference are not few, especially if they are lost in just ten days.
In fact, this decrease was expected to be greater, however, on February 12 he was hovering about 108 points.
However, starting from February 13, it seems that it has started a decrease, which can greatly help reduce the value of the dollar and the American export, if such continues for a period of time.
Today, for example, less than 106 points have decreased for the first time in the past three months, but it is not enough.
With a long -term trend reference, it will be necessary to decrease a much lower than 100 points for significant effects even on the trade balance of the United States of America.
Among other things, he was in a growing stage for more than ten years, despite many climbing and landing, to the point that ten years ago the average was 88 points, with minimal summits to less than 80 points, while since June 2021 it has never decreased to less than 90 points.
Impact on financial markets
A similar scenario can only have negative effects on financial markets.
However, if the decrease in the dollar index continues, it may sooner or later also to a position that may be useful for Trump to reduce or remove definitions.
However, it must be remembered that the dollar index tends to not move much in the short term, to the point that the height from 90 to 110 points took more than a year in 2022.
Fortunately, the decline has already started nearly two months ago, so it is also possible, by the end of the year, to decrease much less than the 100 points sign, and therefore may give some comfort to the financial markets.
