Wall Street, right-wing policies a blind spot for US
At a Senate Finance Committee hearing on March 22, US Trade Representative Robert Lighthizer provided a list of 10 high-tech Chinese industries that the US could target for tariffs, such as aeronautics, modern rail transport equipment and new-energy vehicles, “all of which he says China has said it plans to dominate in its 2025 plan,” CNBC reported.
It is believed that from the viewpoint of the US Trade Representative, the US’ goal is not to trade, but instead to take aim at China’s overall industrial sector. This is equivalent to total suppression.
Japan, also in the firing line of US sanctions, understands this point well, and has said it will retain
its previous sanctions on some steel imports from China.
In fact, even though it is the US imposing sanctions on Japan, and Japan should retaliate in kind, it will not do so.
Instead it also targets China, revealing that Tokyo has an essential understanding of US politics and has judged the international situation precisely. Japan balances its trade deficit with the US mainly by investing in the US.
In the past, we also suggested China should pay back part of the trade deficit to the US market through industrial investment, by using the capital account to balance the current account.
However, if a comprehensive US blockade is implemented, this path will not work, because they would rather block investment than receive it, and will insist on retrieving it from the current account. Thus crucial time will have been lost by going down this road.
However, there is also a blind spot in the current US strategy to block China – Wall Street. I have often pointed out that the main battleground of the trade friction between China and the US is Wall Street, not just in the trade arena.
The US financial market is now in turmoil. Almost all financial research institutions are warning that a global financial crisis is brewing.
The crisis awareness is now a consensus. Except for a few eternal optimists, almost everyone recognizes this huge danger, but no one knows when this major crisis will erupt.
If China were to one day issue a statement that shook the market, it is not beyond the realm of possibility that Wall Street’s financial index may slump by 20 percent within a week.
As a result, a
If China were to one day issue a statement that shook the market, it is not beyond the realm of possibility that Wall Street’s financial index may slump by 20 percent within a week. As a result, a global financial crisis will be detonated, and the effects will be felt worldwide. Who should be held to blame in such a scenario? None but the right-wing anti-globalization hawks of the Trump administration.
global financial crisis will be detonated, and the effects will be felt worldwide. Who should be held to blame in such a scenario? None but the right-wing anti-globalization hawks of the Trump administration. By triggering a trade dispute with China, the US is juggling with knives. As we know, the blind spot in the US policy is Wall Street, so let’s imagine what the world market will experience if it loses its two major trading nations. In the face of the trade friction brought on by the US, we must look at the real problem with clarity, as well as take Trump’s right-wing strategy into consideration. This is the pain point for the US and its partners, and also the moment all investors who want to short-sell are waiting for.