Beyond Markets In Conversation with GROW: How real are Trump's tariff threats?
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Dec 10, 2024 In this engaging conversation, Hong Hao, Partner and Chief Economist at GROW Investment Group, shares his insights on the implications of Trump's tariff threats. He discusses whether these moves are a strategic negotiation tactic or a game changer for global trade. The conversation dives into how U.S.-China trade dynamics might shift, the potential impact on China's economic policies and stock market, and the future trajectory of the yuan amidst these pressures. A fascinating look at the intersection of politics and economics!
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Tariff Threat Caution
- Hong Hao expresses caution regarding Trump's tariff threats, drawing parallels to the 2018 trade war's impact on the Chinese economy and markets.
- He highlights the potential severity of the increased tariffs (from 20% to 60% or even 100%), emphasizing the substantial risks for both the Chinese and US economies.
Interconnected Economies
- Richard Tang notes that US consumption accounts for 30% of global consumption, making it a crucial market for exporters.
- Meanwhile, Chinese manufacturing contributes 30% globally, underscoring the interconnectedness of the two economies.
Impact of Higher Tariffs
- Hong Hao analyzes the potential impact of higher tariffs, noting that China's previous tactics of currency devaluation and price cuts might not be as effective.
- He suggests that both sides could lose, but China potentially more so, with Chinese producers losing market share.