Investors May Be Laughing At China’s “People’s War” Now, But Here Is Why They Won’t Be Laughing For Long…
Posted: 14 May 2019 Michael Snyder
Wall Street is still treating this crisis as a temporary trade dispute, but the Chinese see things completely differently. At this point, the narrative in China is that the U.S. has deeply insulted their national honor, and every angry statement from U.S. officials is just digging the knife in a little bit deeper. The Chinese began their retaliation to Trump’s new tariffs with some new tariffs of their own, but they won’t be stopping there.
As I stated yesterday, China literally has hundreds of different ways that they can hurt us, and the longer this crisis goes the more likely it is that they will utilize all of those weapons.
And we got a hint of what might be coming on Tuesday. An editorial published in government-run media outlets boldly proclaimed that the conflict between the United States and China was now a “people’s war”…
And similar sentiments were expressed on state-owned television during a prime time broadcast…
Amazingly, U.S. stocks actually went up on Tuesday following these remarks. Apparently, investors think that China’s new “people’s war” is pretty funny.
But they won’t be laughing when China starts playing hardball with us.
For example, how much pressure do you think that President Trump will feel when the Chinese suddenly announce a national boycott of U.S. goods in the middle of Trump’s re-election campaign?
As CNBC has pointed out, China has implemented such boycotts numerous times before…
In addition, a massive Chinese boycott of South Korean goods in 2017 turned out to be an immense blow to the South Korean economy.
What do you think that it would do to the U.S. economy and to U.S. financial markets if China suddenly did the same thing to us?
It would be absolute chaos, and Trump would feel an unbelievable amount of pressure to cave in because his re-election prospects would be diminishing with each passing day.
And Trump could not hit back by declaring a national boycott of Chinese goods because he does not have that authority. He could ask his supporters to conduct such a boycott, and undoubtedly some of them would go along, but most Americans would just continue to shop the way that they are shopping right now.
If large U.S. corporations lose all access to the second largest economy in the world, it would be a complete and utter disaster for them. As Matt Egan has pointed out, the Chinese market has become “a critical growth engine” for some of the largest U.S. brands…
In 2018, Apple reported total revenue of 265.6 billion dollars.
51 billion dollars of that total came from China.
Apple is extremely vulnerable, and so are dozens of other large U.S. corporations.
Out in the middle of the country, many farmers are already almost mad enough to pick up their pitchforks and march on Washington because of this trade war.
As a result of our deteriorating trade relationship, soybean exports from the U.S. to China have fallen from $14 billion in 2016 to $12 billion in 2017 to just 3.1 billion in 2018.
And now that trade negotiations have completely fallen apart, the price of soybeans is falling like a rock. In fact, we just saw it hit the lowest level in a decade.
Of course, soybean farmers are far from alone. Thousands upon thousands of farmers all over America are on the brink of financial ruin, and one J.P. Morgan analyst is describing it as a “perfect storm” for U.S. farmers…
It is funny how that term keeps popping up. Without a doubt, a perfect storm is rapidly coming together for the entire U.S. economy, but most Americans are still in denial about what is happening.
As for this “trade dispute”, the truth is that it isn’t going to go away any time soon.
The longer this trade war lasts, the more painful it will become for the U.S. economy.
So Wall Street can laugh for now, but the Chinese are fully convinced that they will be having the last laugh in this matter.
About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News.
From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.
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