The recent victory of Donald Trump in the American elections -immediately- resurrected the spectra of a trade war between the United States and China. The growth of geostrategic and economic tensions between the two economic powers has been one of the variables that the market has neglected. while the tycoon’s victory in the North American elections is made official.
There are now fears that the new tenant of the White House will dust off the measures he already adopted in 2018. and which he had announced during the campaign that he would reissue were fully taken up by the Asian stock markets, which, at the dawn of the election of Trump as president of the new American government (during this Wednesday’s session) , saw how the bears took over the trading floors.
The Hong Kong stock market was the biggest victim, with the Hang Seng losing more than a 2%while that of mainland China received the one that will be the maximum leader of the first economy on the planet with declines close to half a percentage point.
“We believe that tariffs are the policy with the greatest potential economic impact of all those proposed by the new president-elect. The 60% tariffs on imports from China and 10% over those in the rest of the world could make U.S.-China trade unsustainable, reducing U.S. domestic demand and corporate profits, and. lead to a decline in GDP growth around the world, particularly in China,” explains Mark Haefele CIO of UBS, while assuring that “these tariffs could also contribute to higher inflation in the United States”
“Central banks are increasing their gold reserves to depend less on the US dollar and, in an extreme case, to be less sensitive to US sanctions,” he underlines. Carsten Menke of Julius Baer, who notes that “This particularly applies to the People’s Bank of China, which still has a relatively low proportion of gold in its foreign exchange reserves“. In this sense, the Swiss entity considers that “the resumption of gold purchases by central banksespecially from China, is expected to be much more important than the outcome of the presidential election in the United States. »
From a perspective more linked to the monetary field, Ebury experts highlight how ““Many Asian currencies closely tied to the Chinese economy traded down more than 1% overnight.”
And more in terms of sector, Johannes Jacobi, of Allianz GIobal Investors, assures that “an increase in customs tariffs, particularly aimed at China, “could harm security providers outside the United States, benefiting American cybersecurity companies.”
Whatever it is, and as they reflect it by J. Safra Sarasin Sustainable AM, we need to see how get married the measures that Trump finally adopted with the recovery plan recently announced by this Eastern country and which was supposed to stabilize the short-term growth of Chinese economic power. “So far, weak indicators of economic activity indicate a slight improvement, but It is unlikely that the measures announced so far will reverse the economic cycle and stop the correction in the real estate market.“warns Claudio Wewel, currency strategist at the fund manager of the private banking group.
