Who Will Call Trump’s Bluff?

The goals (of Trump) will remain unchanged, the routes will have to be adjusted.

*CHINA:NO LONGER MAKES ECONOMIC SENSE IF US IMPOSES MORE TARIFFS
*CHINA TO LAUNCH 200 BILLION YUAN PLAN TO SUPPORT EXPORT-TO-DOMESTIC SALES TRANSITION.
*EXPANDS SERVICE SECTOR OPENING-UP PILOT TO 9 MORE CITIES, INCLUDING
*CHINA STOCK EXCHANGES SET DAILY RESTRICTIONS ON NET SHARE SALES BY INDIVIDUAL HEDGE FUNDS AND BIG RETAIL INVESTORS,
*CHANGES STATUS OF US CHIPS TO PERMIT THEIR IMPORT

Authored by “M”,  Macro Trader and GoldFix Founder out of Asia

The reciprocal tariffs announcement has sent global risk assets down the toilet, and while the pajama investors endured a rough weekend worrying about the market open on Monday, some of the brave and clairvoyant institutional investors had already adjusted their view and positioning.

I’m here to offer an unpopular, and probably even a weird take. As communicated before with the Founders audience, the hegemonic mentality and subsequent actions so far have not seen any remotely intended results. US went from 56% of total global trade before Trump 1.0 took office to circa 21% recently, with a growing global trade network and bilateral settlement systems that largely existed outside the SWIFT (dollar) system, it merely was shocking to whomever that have been paying attention that the Trump Admin thought the Tactical Tariffs would be so effective and in line with other policies to quickly reform the US economy.

Here comes the main point of this communication. China is prepared to properly DECOUPLE this time. They have been preparing for quite a few years already, both structurally and economically. This is precisely why, in brief, that each time Trump 2.0 threw a punch, China retaliated immediately. This is also precisely why I’ve repeatedly said that there was no basis for a Xi-Trump meeting, unless Trump figures out what he needs to do first to form that basis of direct dialogue. It’ll be interesting to see if and how Europe and other countries will follow China’s path in dealing with US tariffs. Global supply chains get tossed up again after Covid, but if the economic damages significantly outweigh the inflation, the Fed might just give us a pulse. So much for not wiping out the middle class globally during the process.

Trump may fold and find himself a ladder [off] the circus stage soon, if the US equity market gets royally clobbered and Elon finally begins to care about his rapidly diminishing wealth. That’ll be the cue to re-load the boat. It may appear a simpleton’s view but at this moment the only certain thing is that whilst the goals (of Trump) will remain unchanged, the routes will have to be adjusted. Gold remains a structural buy on dips, some quick plays have emerged in FX, and for now everyone seems to agree the rates market is pricing in the tariffs correctly this time (what are the odds!).

end note/////////////////