The trade war between the United States and China has been ongoing for over a year now and there is no mutually beneficial solution in sight. Last week, Trump imposed a 10% tariff on China-made goods that initially had no tariffs. The move led China to place a ban on its home-based companies preventing them from buying agricultural produce from united states-based companies. China also allegedly dropped the value of its currency leading to a downturn in the global stock market. Now, investors are worried that the Chinese government may be ready to suffer an economic downturn in a bid to hurt Trump and force him into negotiating a better deal or make sure he isn’t reelected.
China May Willingly Hurt Its Economy According To Investors
According to the chief rates strategist at Nomura, Naka Matsuzawa, investors across the globe are afraid that China will submit itself to economic meltdown to affect the global economy and prevent Trump’s re-election in 2020. The analyst noted that China’s retaliation to Trump’s actions put Chinese businesses at risk. However, the overall goal is to prevent Trump’s reelection and renegotiate terms with the new, hopefully Democratic, leader in 2020.
The investor believes that the recent manipulation of the yuan and ban on the United States is just the tip of what is to come if a solution isn’t reached anytime soon. By stopping Chinese companies from buying agricultural-based products from the United States, China is giving farmers an incentive to vote for anyone who isn’t Trump.
Donald Trump made a post on Twitter in line with what the investor said. He said he knows that China is trying to ensure that he is not reelected. However, he said that when he eventually gets reelected, he will make sure that he gives them a tougher deal than what they currently have. He is not willing to make any compromise.