News
The U.S have decided on entering into a new cold war
The U.S have decided on entering into a new cold war

China and America – The Cold War

4 months agoByBob Mason

There’s been plenty of noise over Trump and how the relationship will evolve with China, Trump’s campaign trail leaving few with hopes of the Republican building stronger ties with China and the Orient.

We don’t have to cast our memories too far back into 2016 to recall Trump’s intentions to impose punitive trade tariffs on China, which could go as high as 45%.

His Election Day victory speech suggested that the campaign trail rhetoric was just that, some tough talk for the voters, the president-elect talking of a willingness to work with any nation willing to deal fairly with the U.S.

Earlier in the month, China was certainly pleased with Trump’s decision to appoint Terry Branstad as the U.S Ambassador to China. Branstad had first met the Chinese head of state more than 30-years ago and the appointment was considered an olive branch in what had been a tough period for relations between the two super powers.

The gesture back in early December is likely to be one of very few the U.S will extend to China over the near-term however, Trump appointing Peter Navarro as the lead for a newly created trade council inside the White House, a clear intent by the U.S to handle trade with China once and for all.

The debate over whether the chicken or the egg came first springs to mind. The appointment of Navarro, a fierce critic of U.S – China relations reflecting Trump’s clear intentions, which appear to have been unwavering since the start of the election campaign trail, suggesting that relations are about to get ugly. The appointment of Branstad as the Ambassador to China had initially left the markets relieved that the rhetoric was just that, rhetoric. Now it seems that Branstad will be China’s punching bag, a familiar face for the Chinese to face off to, while Navarro and the team look to go about their business.

Navarro and Trump have continued to accuse China of currency manipulation, with the president-elect and his new partner in crime, accusing China of waging an underground trade war with the U.S, since China joined the WTO over a decade ago.

Year-to-date, the Yuan has fallen 7.02% against the Dollar and down 0.01% on the day and, while the Chinese government is at least optically doing its best to stem the tide, further declines are expected, which are likely to further increase tensions between the two nations. We don’t expect China to look to strengthen the Yuan any time soon, despite threats from the president-elect and the team.

Navarro will be looking to cut the U.S trade deficit and China is the main target, though history suggests that any punitive trade tariff on China will not only adversely impact global economies, but more importantly that of the U.S.

It’s not just about trade however, and the Trump administration seems hell bent and going about its business with little regard, the president-elect having contacted the Taiwanese Prime Minister directly, in defiance with protocol, in the aftermath of the election victory

In response, China has intercepted a U.S Navy Drone in international waters, while also reportedly flying a nuclear bomber off the coast of Taiwan as warnings to the Trump administration, though any significant action by China will likely be on ice until the U.S makes its first move, the Chinese expected to be retaliatory for now and let’s not forget, China is the U.S government’s 2nd largest lender, any threat of a call on its debt a certain negative for global financial markets and the U.S government.

The U.S have decided on entering into a new cold war, though this time with the Chinese, the Trump administration continuing to build ties with the Russian’s, despite the clear risks of dealing with the Russians and the head of state.

Time will tell, but ultimately it will boil down to which of the super powers is more self-sufficient and as things stand, China certainly looks better positioned than the U.S, the U.S economy in no position to live off the land. The U.S monthly goods trade deficit with China remains by far the largest, $28.9bn in October, with the deficit with the EU a distant 2nd at $12.9bn and with U.S consumption where it is today, it would take some time before the U.S is able to replace goods manufactured in China and that’s before considering cost.

More News

North Korea’s Defiance of Trump Pushes Gold to Forefront

Gold is likely to be in focus this week after taking a backseat last week to the French elections, central bank meetings, and U.S. policy announcements. Pushing it back to the forefront will be the possibility of escalating military activity in North Korea based on events over the week-end. Demand for the safe-haven metal fell … Continue reading North Korea’s Defiance of Trump Pushes Gold to Forefront

4 Things You Need to Know Before the Market Opens

The French elections pushed global markets to record highs and postponed investors’ concerns for another week. The Euro climbed versus the US dollar after a long time of consolidation as Emmanuel Macron’s victory in the first round put at ease the European political uncertainty. Safe haven assets prices also dropped, and currently the markets major concern … Continue reading 4 Things You Need to Know Before the Market Opens

Stockpair - Best Customer Support Service

Interview with Awarded Broker – Stockpair

Below is an interview with the ‘Best Customer Support Service 2016‘ awarded broker – Stockpair. Stockpair Review: “Stockpair is a binary options broker that specializes in offering retail financial traders a fuss free way to trade the financial markets. The unique thing about Stockpair is the fact that they specialize in pair options. In fact, … Continue reading Interview with Awarded Broker – Stockpair

Kiwi Plunges on Trump Trade Policy Concerns

The New Zealand Dollar also fell under pressure despite the rise in demand for risky assets. It tumbled to its lowest level of the year in reaction to concerns over the Trump Administration’s trade policy. The NZD/USD ended the week at .6859, down 0.0168 or -2.40%. New Zealand Dollar traders reacted negatively to the news … Continue reading Kiwi Plunges on Trump Trade Policy Concerns

U.S. GDP Comes in Below Expectations at 0.7 Percent

The U.S. economy sputtered in the first quarter of Donald Trump’s presidency, growing at the slowest pace in three years while serving as a reminder of the fragility of the nation’s economy. According to the Commerce Department, U.S. Gross Domestic Product grew at a 0.7% annual rate in the first quarter from the preceding three … Continue reading U.S. GDP Comes in Below Expectations at 0.7 Percent

Euro Jumps on Surprise EU Inflation Figures

European stock markets are mixed, with the FTSE 100 underperforming following weaker than expected Q1 GDP numbers which will give the BoE some room before having to tighten rates. Eurozone markets managed to stabilized and are posting modest gains. It is the DAX that is underperforming flat on the day, while MIB and IBEX are … Continue reading Euro Jumps on Surprise EU Inflation Figures

Expand Your Knowledge

Coffee Beans

How do You Like Your Coffee?

Long before the Pepsi’s and Coke’s of the world, more than 300 years ago, to be precise, people found about the leaves of a plant which had a nice taste and seemed to give them a lot of energy when eaten as such or when they brewed and drunk it. This was from a plant … Continue reading How do You Like Your Coffee?

Weed

How to Take your Weed Higher?

As the markets continue to evolve, opportunities for investment continue to expand, providing investors an opportunity to invest in companies directly linked to the manufacture or growth of a particular product, or to invest in a range of companies exposed to the manufacture, growth and sale of a product and / or products. The debate … Continue reading How to Take your Weed Higher?

Crude Oil Affects Your Wallet

How Do Oil Prices Affect Your Wallet?

It is important for everyone to keep an eye on the live oil prices as it affects a large part of our life on a day to day basis. One of the main reasons for this fact is that unlike other commodities like gold, silver, diamond etc., oil is an essential commodity and considering its … Continue reading How Do Oil Prices Affect Your Wallet?

Currency wars threat global economy and political stability

World War III – The Currency War

Are We Entering a Phase of Currency War? After a long period that last for decades, we are now in a time, over the last decade or so, where wars are fought using currencies rather than using weapons. Countries realize that it is easier, cheaper and less violent to bring destruction to other countries by … Continue reading World War III – The Currency War

The Big Investment of Stephen Curry

In 2011/12, Stephen Curry had a repetitive ankle injury that made him miss most of the season. During the summer, he had two ankle surgeries while he was trying to turn his career around, and like many other big talents that ended their career with cruel injuries, the Warriors fans did not expect to see … Continue reading The Big Investment of Stephen Curry

Can Le Pen Make France Great Again?

The Story of Marine Le Pen

Marine Le Pen, the president of the National Front, is not just a politician, but also a layer taking France by storm at the age of 48, young when compared with the Establishment. Sarkozy, Fillon and Hollande all 62 years of age with only center-left Macron her junior at the age of 39. Marine Le … Continue reading The Story of Marine Le Pen

See All

FX Empire - the company, employees, subsidiaries and associates, are not liable nor shall they be held liable jointly or severally for any loss or damage as link result of reliance on the information provided on this website. The data contained in this website is not necessarily provided in real-time nor is it necessarily accurate.
FX Empire may receive compensation from the companies featured on the network.

All prices herein are provided by market makers and not by exchanges. As such prices may not be accurate and they may differ from the actual market price. FX Empire bears no responsibility for any trading losses you might incur as link result of using any data within the FX Empire.