[Source/Observer Network Qi Qian] US President Trump has recklessly provoked a global tariff war, causing massive shocks in the global market. Due to the high uncertainty of Trump's policies, on the evening of April 10 local time, the three major US stock indexes plummeted again, and US Treasury bonds were sold off once more.
That night, Trump admitted at a cabinet meeting that his policies had "transitional problems," but that "there will always be difficulties during the transition period."
"Rare, bad, and worrying."
After Trump recently announced the "reciprocal tariff" measures, the US stock market experienced severe fluctuations. After a brief rise on the 9th, it continued its downward trend on the 10th.
According to reports by The New York Times and the BBC, the S&P 500 index fell more than 4% after noon on the 10th, while the Nasdaq Composite Index, which is mainly composed of technology stocks, fell by 5%. By closing, the S&P 500 index fell by 3.6%, the Dow Jones Industrial Average fell by 2.5%, and the Nasdaq index fell by 4.31%.
Among them, over 80% of the stocks in the S&P 500 index closed lower that day. The sharp drop in oil prices led the energy sector to lead the decline.
On the 10th, the S&P 500 index fell again. The New York Times chart
Selling pressure returned to US Treasury bonds. The yield on the 10-year US Treasury bond climbed to 4.37% that day, reaching its highest level since February. At the same time, the dollar fell by 1.7% against a basket of currencies of its main trading partners, marking the largest single-day decline so far this year. These assets are usually seen as havens for investors during turbulent times.
"Rare, bad, and worrying." Krishna Guha, vice chairman of investment firm Evercore ISI, described the performance of the US stock market on the 10th in this way. He said that such situations were very "rare," as there have been only four instances in the past 30 years where the US Dollar Index fell by more than 1.5% and the yield on 30-year US Treasury bonds rose by more than 0.1 percentage points.
The New York Times analysis pointed out that the performance of the US stock market on the 10th continued the chaotic trading environment and significant declines since Trump initiated the tariff war. James Rossiter, global macro strategist at TD Securities, wrote in a report: "Despite good news, policy uncertainty remains high and will weigh on the US economy. Companies will struggle to plan."
A report released on the 10th showed that the US inflation rate fell more than expected in March. Economists believe that Trump's current tariff policies will still come at a high cost, not only leading to slower economic growth but also causing rising inflation.
Trump: There will always be difficulties during the transition period
After the US stock market continued to fall, Trump convened a cabinet meeting on the evening of the 10th.
"There will always be difficulties and cost issues during the transition period, but in the end, it will be something wonderful." Trump added, "This is the most important day in the history of the market." He claimed that investors were satisfied with the way America was run, and the government was "working hard to ensure fair treatment for America around the world."
Trump confidently said that now "everyone wants to reach an agreement" to reduce tariffs, implying that he might adjust this "benchmark." "We are working with many different countries, and everything will go smoothly. I think everything will go very smoothly, but we are currently in good shape."
Trump called his tariff policy a "transitional problem" at the cabinet meeting on the 10th. Video screenshot
When Trump made the above remarks, US Commerce Secretary Rostek interjected, echoing Trump. He claimed that many countries were negotiating with the US now, and "they would never propose such suggestions without the president's policies."
"We are getting the respect we deserve now," Rostek continued to boast. "You will see one historic deal after another."
During the meeting, Trump once again demonstrated the "uncertainty" of his policies. He told reporters that he was willing to negotiate on the 10% "benchmark tariff" for most countries, hinting that he might adjust this "benchmark."
Trump and Rostek echoed each other. However, The New York Times pointed out that details determine success or failure. They gave very few specific details at the cabinet meeting. They just said things would get better, but didn't say much about specific measures.
It is worth noting that after the cabinet meeting, a reporter loudly asked Trump and officials from the Trump administration how they viewed the Democrats' accusations of "market manipulation" by the Trump administration. Trump ignored it.
In the past week, US stocks have fallen sharply due to Trump's new tariff policies. On the morning of the 9th local time, Trump suddenly urged on social media to "buy" US stocks. A few hours later, Trump made a major policy reversal, suddenly announcing a "90-day suspension of tariffs," causing US stocks to rebound strongly.
This change quickly triggered questions from the US public about Trump's "manipulation of the market" and "insider trading." Democrats immediately followed up, calling for investigations. Others demanded that members of Congress who recently bought US stocks disclose relevant information.
Before the policy change, Trump called for bottom fishing in the stock market several hours earlier. Social media screenshot
American farmers lament: We are becoming sacrifices again
According to reports, after the US stock market shook again on the 10th, Treasury Secretary Scott Beason surprisingly said, "I found nothing unusual." In response to China's announcement of imposing high retaliatory tariffs on the US, he made a "sharp and somewhat surprising" response: "So what?"
Regarding this, The New York Times published an article pointing out that although Beason tried to downplay it, China's decision to raise tariffs on US imports to 84% could have consequences much more serious than what Beason described. Losing the Chinese market will cause particularly severe economic impacts on agriculture and workers in many red states, who were exactly the voter groups that helped Trump win the election.
Sean Stein, president of the US-China Business Council, said: "Those American companies that have been selling products to China and achieving great success may no longer be able to do so." He added, "Tariffs almost cover everything between the two countries," meaning that all trade sectors, from aviation to medical imaging to agriculture, will be affected.
"If this situation persists for a long time, there will be a large number of bankrupt farmers," Caleb Ragland, a farmer in Kentucky and president of the American Soybean Association, expressed concern. "The scars left by the last Sino-US trade war have yet to heal," he said, adding that we are now facing compounded injuries.
American corn growers are also anxious about this trade chaos. Kenneth Hartmann Jr., president of the National Corn Growers Association, told The New York Times: "The longer this uncertainty continues, the more worried we are that our growers will plant large amounts of corn but won't find reliable markets. Our farmers want to ensure that domestic and international customers can buy our products in the coming months and years."
As mentioned, during Trump's first term, initiating the Sino-US trade dispute caused American farmers to lose billions of dollars in income in 2018 and 2019 alone. At that time, to compensate for the losses of farmers, Trump allocated as much as $23 billion in subsidies.
Now, American farmers are again calling on the Trump administration for federal relief. Ragland pointed out: "If we continue to be used as bargaining chips and sacrifices, the government must take economic measures to help us maintain our livelihoods."
In response to the Trump administration's unilateral actions in provoking tariff wars with the entire world, China has repeatedly stated its position and responded firmly.
On April 10, Foreign Ministry spokesman Lin Jian presided over a press conference and stated that the US side, out of its own self-interest, uses tariffs as a weapon to exert maximum pressure and seek private interests, seriously infringing on the legitimate rights and interests of various countries, seriously violating World Trade Organization rules, seriously damaging the multilateral trading system based on rules, and seriously undermining the stability of the global economic order. This is openly defying the world and going against it.
Lin Jian said that taking necessary countermeasures to oppose the US hegemonic practices is not only to safeguard its own sovereignty, security, and development interests, but also to uphold international fairness and justice, safeguard the multilateral trading system, and protect the common interests of the international community. Righteousness gathers support; injustice leaves one isolated. The US's逆行 will not gain people's approval and will ultimately fail.
Lin Jian emphasized that there will be no winners in a tariff war or trade war. China does not want to fight, but it is not afraid to fight. We will never sit idly by while the legitimate rights and interests of the Chinese people are deprived, nor will we allow the international economic and trade rules and the multilateral trading system to be destroyed. If the US insists on fighting a tariff war or trade war, China will certainly see it through to the end. The US placing its own interests above the common interests of the international community and sacrificing the legitimate interests of all countries worldwide to serve its hegemonic interests will inevitably face stronger opposition from the international community.
This article is an exclusive article of Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7491855214241169960/
Disclaimer: This article represents the author's personal views. Please express your attitude by clicking the "upvote/downvote" button below.