Vice President Mike Pence accused China on Thursday of trying to undermine President Donald Trump as the administration deploys tough new rhetoric over Chinese trade, economic and foreign policies.
At the Hudson Institute think tank, Pence said China was using its power in “more proactive and coercive ways to interfere in the domestic policies and politics of the United States.”
“China wants a different American president,” Pence said.
Pence’s speech came a week after Trump accused China during a meeting of the U.N. Security Council of interfering in American elections to help his Democratic rivals.
Trade war escalates as China halts all oil imports from US
Late last week, JPMorgan’s strategist John Normand announced that the largest US bank “adopted a new baseline that assumes a US-China endgame involving 25% US tariffs on all Chinese goods in 2019” because “the US and China will not resolve their differences this year and that the Administration will make good on its threats to escalate.” Such a full-blown trade war “could take $8 off consensus 2019 EPS projections of $179 and reduce next year’s EPS growth from 10% to 5% year-on-year” with JPMorgan predicting that this could “potentially end the US stock market rally even assuming a forward multiple of 17, unless some other offset materializes.”
JPMorgan wasn’t finished, however, and around 2pm on Wednesday, JPMorgan took its “new baseline” call further when it announced that as a result of its new baseline assumption for a “full-blown trade war” next year between the world’s two largest economies, the bank downgraded its bullish call on Chinese stocks. Echoing what it said previously in the context of US stocks, JPMorgan strategists including Pedro Martins Junior, Rajiv Batra and Sanaya Tavaria wrote that the trade conflict will only escalate as the U.S. maxes out tariffs on Chinese imports, the dollar strengthens and the yuan weakens further.
Josh Sigurdson talks with author and economic analyst John Sneisen about the recent move made by China to release a $3 billion bond backed in US dollars! This would be only the third US Dollar denominated issuance by China in the last 14 years. So the rarity of this bond is quite incredible considering the number of non-USD backed bonds over the past 14 years as is illustrated in charts in the video. As the trade disputes grow more and more unstable and China actually loses some ground, they are making moves that can possibly turn the tides. All of these economies will eventually come crashing down, but with that said, China has the upper hand as their citizens stock up on gold, their populace is ridiculously subservient to their cashless system and China basically buys up countries throughout the world much like the IMF did for so long. This makes China terrible, but also smart. They are setting themselves up to be the next world reserve currency and the world order itself. The IMF is looking to base itself in Beijing and one can imagine what that means for the SDR as the US dollar comes crashing down. So is China backing themselves up with a bit of security after a string of losses? Yes. Does it impact China dramatically long term? No, they appear to have found a few ways around this current trade dispute and they look like they’re getting the upper hand long term.