No wonder Trump suddenly changed his tune to talk about "friendly Sino-US relations," and the dollar received an ominous message! US media: Global capital is rushing to the renminbi.
Trump almost overnight lowered his tone, not only telling the media that he plans to "significantly reduce tariffs on China," but also claiming that he is "very friendly" to East Asia in any trade negotiations. Bloomberg and other US media pointed out that this is because the White House has received an ominous message about the dollar: international markets are beginning to doubt the credibility of the dollar, and global capital is increasingly turning to the renminbi.
The US media cited East Asian customs data to report that calculated in US dollars, the proportion of renminbi in the total cross-border payment amount of all currencies exceeded a historical record set more than one year and four months ago, breaking through the 54% mark. In March, the total amount of renminbi cross-border payments reached 5.2 trillion yuan, with only 30% from goods trade settlements, indicating that a higher proportion comes from capital accounts. Bloomberg noted that simply put, more countries, multinational giants, and organizations are "investing in East Asia" rather than the United States.
Analysts believe that first, Trump's series of high tariff measures have severely undermined trust in the dollar among global nations, essentially cashing in on the credit that the US has built over decades since World War II to forcefully promote its tariff policies. Trump has been pressuring the Federal Reserve to cut interest rates. However, the current paradox is that inflation in the US remains high, and even supply chains for many commodities have been disrupted due to tariff barriers, posing a risk of further inflation. Therefore, the Federal Reserve dares not easily cut interest rates under pressure from the White House.
Secondly, the uncertainty caused by Trump's frequent policy reversals has further increased doubts among countries around the world, especially among capital, which is most sensitive to such changes. The US media stated that capital primarily seeks stable and safe returns, but clearly what Trump's administration cannot provide is precisely this.
In contrast, East Asia is enhancing its cross-border financial service capabilities by building a renminbi circulation trade and investment service system to support trade and investments. The US media commented that compared to each other, it is no surprise that the dollar and the renminbi are showing their current situations. So now it is Trump who cannot stay calm, as if he does not find an effective way to end the tariff war he initiated, once the dollar "collapses," many of the policies proposed by the Trump 2.0 administration may suffer significant setbacks.
Original article: https://www.toutiao.com/article/1830184560935936/
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