In a TruthSocial post from Donald Trump, he says that tariffs will need to be raised on China goods coming into the US as a result of China’s recent export controls on rare Earth’s.
A summary of bullet point format:
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China’s move: China has sent letters worldwide signaling intent to impose export controls on rare earths and other production elements, even those not manufactured in China.
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Global reaction: Other countries are angry and alarmed, viewing this as sudden trade hostility that could disrupt markets globally.
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Surprise factor: The U.S. relationship with China had been positive over the past six months, making this move especially unexpected.
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China’s strategy: Seen as a plan to build a monopoly over rare earths and magnets, holding the world “captive.”
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U.S. stance: The U.S. also holds stronger monopoly positions in other areas, which haven’t been used — but now may be deployed in response.
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Presidential response: Trump has not spoken with Xi, canceling plans to meet at APEC in South Korea; considers the timing hostile, especially as it coincided with a peace breakthrough in the Middle East.
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Potential countermeasures: U.S. preparing financial responses, including a massive increase in tariffs on Chinese goods and other measures under review.
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Outlook: While potentially painful, Trump frames this as ultimately a long-term positive for the U.S.
The US market is not take it well with the NASDAQ index down 272.2 or -1.19%. The S&P index is down -56.50 point or -0.84%, while the Dow industrial average is down -285.2 or -0.61%.
US yields are lower with the 10 year yield down -7.7 basis points at 4.070%. The two-year is down 5.4 basis points at 3.545%.
The USD has moved sharply lower.
- EURUSD: The EURUSD is trading down toward its 100 day moving average and 100 hour MA at 1.1633. The high price of just reached 1.1621.
- GBPUSD: The GBPUSD is back above the old floor between 1.3323 and 1.3341.. The high price just reached 1.3370. The falling 100 hour moving averages at 1.33904.
- USDJPY: The USDJPY has moved below its low from yesterday near 152.11 and the rising 100 hour moving average at 152.01. The low price of just reached 151.85.
This article was written by Greg Michalowski at investinglive.com.