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US-China trade war seems to never end
US-China trade war seems to never end
There is little hope that the US-China trade war will end up soon. Despite positive sentiment, a new wave of conflict did not surprise market participants. American President Donald Trump has announced new tariffs on the rest of the Chinese imports. Before that, he had pledged to resolve the conflict soon. Trump blames China for failing to fulfill its commitments. He expected Chinese President Xi Jinping to make a deal - buy more agricultural products from American farmers and prevent fentanyl supply from China. But Xi didn’t do that. One statement was enough to crush the markets. News from the global trading floors is similar to military communique. The three main indexes - Dow Jones, Nasdaq and S&P 500 - dropped by almost 1 percent each. The yuan is experiencing a record drop, hitting fresh lows one by one. The commodity market suffered the most. Brent futures plunged by 6 percent in an hour, almost breaking the mark of 60 dollars per barrel. WTI crude oil fell below 54 dollars. Copper futures lost nearly 2 percent. Only gold, which benefits from any war, is rising. Recently, precious metal decreased to 1400 dollars per ounce. Afterwards, it rose from the lows by 3.5%, reaching the level of 1450 dollars. There is an opinion that Trump deliberately escalates tensions in order to pressure not only China, but also the Federal Reserve. After all, if the markets continue falling, the regulator will have to introduce more rate cuts. This is exactly what Trump wants.

Published: 2019-08-09 18:32:28 UTC
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