FLASH
Shkruar nga Giuseppe Sarcina
The risk is that the trade war will spread into a total economic collapse, reducing the value of production, with possible consequences for inflation, investment, and wages.
The euro's comeback on Wall Street lasted only 1 day. This morning began with a decline in the main indexes of the New York Stock Exchange. Dow Jones down 1.6%; Nasdaq, -2.66%; S&P, -2.04%. Therefore, the climate has not improved after the partial withdrawal of Donald Trump.
On Wednesday, April 9, the US president imposed a 90-day "moratorium" on countries hit by a wave of "reciprocal tariffs." But the leader of the White House has not changed his mind about China. In fact, he has increased the tariffs by announcing customs duties of 125%. Beijing immediately responded with tariffs of up to 84% on goods imported from the US.
The escalating conflict between the world's two largest economies is causing anxiety in financial markets at first glance. From the stock markets, the alarm spreads to companies and then to governments. Who will stop first?
Wall Street fears that the country led by Xi Jinping could unleash a deadly weapon: the devaluation of its currency, the yuan. The signs are already visible: The yuan has hit its lowest value in 17 years against the dollar. China's central bank has let the national currency fall for six straight days. A further drastic devaluation would have the effect of significantly reducing, if not eliminating, the impact of the tariffs.
The risk is that the trade war will spread into a total economic collapse, reducing the value of production, with possible consequences for inflation, investment, and wages.
The move is also risky for China: devaluation would provide more support for exports, but could cause, among other things, a disorderly outflow of capital from the country. For this reason, international investors have so far considered this hypothesis unlikely. / Adapted from “Pamphlet” by “Corriere Della Sera”
Lini një Përgjigje