In a TruthSocial post from Donald Trump, he says that tariffs will need to be raised on China goods coming into the US as a result of China’s recent export controls on rare Earth’s.
A summary of bullet point format:
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China’s move: China has sent letters worldwide signaling intent to impose export controls on rare earths and other production elements, even those not manufactured in China.
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Global reaction: Other countries are angry and alarmed, viewing this as sudden trade hostility that could disrupt markets globally.
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Surprise factor: The U.S. relationship with China had been positive over the past six months, making this move especially unexpected.
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China’s strategy: Seen as a plan to build a monopoly over rare earths and magnets, holding the world “captive.”
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U.S. stance: The U.S. also holds stronger monopoly positions in other areas, which haven’t been used — but now may be deployed in response.
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Presidential response: Trump has not spoken with Xi, canceling plans to meet at APEC in South Korea; considers the timing hostile, especially as it coincided with a peace breakthrough in the Middle East.
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Potential countermeasures: U.S. preparing financial responses, including a massive increase in tariffs on Chinese goods and other measures under review.
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Outlook: While potentially painful, Trump frames this as ultimately a long-term positive for the U.S.
The US market is not take it well with the NASDAQ index down 272.2 or -1.19%. The S&P index is down -56.50 point or -0.84%, while the Dow industrial average is down -285.2 or -0.61%.
US yields are lower with the 10 year yield down -7.7 basis points at 4.070%. The two-year is down 5.4 basis points at 3.545%.
The USD has moved sharply lower.
- EURUSD: The EURUSD is trading down toward its 100 day moving average and 100 hour MA at 1.1633. The high price of just reached 1.1621.
- GBPUSD: The GBPUSD is back above the old floor between 1.3323 and 1.3341.. The high price just reached 1.3370. The falling 100 hour moving averages at 1.33904.
- USDJPY: The USDJPY has moved below its low from yesterday near 152.11 and the rising 100 hour moving average at 152.01. The low price of just reached 151.85.
