Tariff War: Whatever Donald Trump said about China on the very first day of his return to the White House, Chinese stocks got strong support. As soon as Trump formed his government, he mentioned 25 percent tariff on Canada and Mexico and said that a decision on this would be taken before February 1, but if tariff was not imposed on China yet, then the buying of Chinese stocks increased. Regarding China, he did not give any timeline as to when additional tariffs would be imposed on China. The Hang Seng China Enterprises Index jumped more than 1 percent and China Mainland’s benchmark index CSI 300 also jumped nearly half a percent.
Chinese shares rose the fastest in Asia
After the formation of Donald Trump’s government once again, Chinese shares are rising the most in Asia. Earlier, there was a lot of pressure on the market for months due to fears related to trade tensions. Earlier this month, the MSCI China index was dominated by bears and the offshore yuan fell to a record low despite efforts by China’s central bank. Now regarding the future, Serena Zhou, an economist at Mizuho Securities Asia Limited, says that it is difficult to say anything right now. According to Serena, America can still use 60% tariff as a weapon to negotiate better terms with China.
What will be the trend in the global market?
Markets Live strategist Mark Cudmore says global stocks will rise while the dollar will fall further as President Trump’s stance so far suggests his stance on tariffs is more cautious and long-term than threatening. It is, at least for now. There is also increasing hope that a deal will be struck between China and America. Last week, there was a call between Trump and Chinese President Xi Jinping, which Trump described as very good.