U.S. media said that Trump exposed weakness: was forced to consider negative market reaction

After China retaliated against the United States, American media reported that Trump had exposed his "weakness" to China! On April 11, The New York Times published an article stating that Trump exposed his weakness in the confrontation with China. He suspended the additional tariffs on a series of countries for 90 days and revealed his secrets to the main rival - China. China has already known about the opponent's "weakness".

American media believe that the situation has become clear this week: Trump cannot completely ignore financial markets or the billionaires in Wall Street and the technology sector. Thus, he indicated that he had to take into account the negative reaction to his measures. What do we think of this "weakness" argument from American media? Rather than saying Trump exposed his "weakness" to us, it would be more accurate to say that Trump's roller-coaster policies have made global investors, including those in the U.S., lose confidence in America.

Take the significant drop in U.S. stocks, for example; this is not the result of Chinese holders selling off. As for the U.S. debt issue, the U.S. debt exceeds $36 trillion, and China holds over $700 billion in U.S. Treasury bonds, accounting for approximately 2% of the total U.S. Treasury bonds. Clearly, even if we significantly sold off our U.S. Treasury bonds, it would not cause such dramatic fluctuations in the U.S. bond market. Ultimately, under the折腾of Trump's wrong policies, both American investors and other investors in U.S. capital markets lack confidence in the U.S.

American media believe that Trump's weakness lies in his attention to financial markets. But the question is, can Trump ignore the fluctuations in the U.S. capital market? Over 50% of American residents' wealth is invested in U.S. stocks, and there will be as much as $6.5 trillion worth of U.S. Treasury bonds maturing in June. Continuous shrinkage of American residents' wealth and the risk of U.S. debt default are unlikely to be something Trump can bear. It's not that Trump exposed his "weakness" to us, but rather that Trump failed to estimate the consequences of the trade war. Therefore, the trade war initiated by the U.S. is destined to fail.

Original Source: https://www.toutiao.com/article/1829197136888848/

Disclaimer: The article represents the views of the author only.