Image source: "Donald Trump" by Gage Skidmore is licensed under CC BY-SA 2.0
While at a meeting with French President Emmanuel Macron in London on Tuesday, Donald Trump spoke about the prospects of an indefinite postponement of the trade deal settlement with China.
His remarks greatly upset markets as major indices and shares tumbled during Tuesday’s trading session after the recent global optimism for the resolution of the international trade uncertainty was promptly thwarted.
Market analysts fear that the projections for marginal global growth in early 2020 are now once again endangered following Trump’s reinstated policy of tariffs imposition.
To a question by a reporter regarding his opinion of the possibility of settling phase one of the trade deal negations with China by the end of the year, Trump vaguely responded by saying ‘I don’t have a deadline’.
The President was seemingly unmoved by the international panic stemming from the ongoing trade uncertainty globally.
He also said that he would go on with his previous plans to impose a new set of tariffs on China by the 15th of December unless a headway is made in the current negotiations impasse.
In addition to his threats against China, Donald Trump said in Twitter that he is going to impose tariffs on Argentina and Brazil effective immediately, because of ‘massive devaluation of their currencies’.
Moreover, he reinstated his threats to sanction Europe following a recent ruling by the World Trade Organization against the EU over illegal Airbus subsidies.
Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries. The Federal....
— Donald J. Trump (@realDonaldTrump) December 2, 2019
Trump’s reinstated policy of tariffs imposition globally comes amidst ongoing impeachment probing internally, which makes his decision seem like a political move to gain leverage externally ahead of the 2020 elections.
Meanwhile, according to people familiar with the matter, the House Intelligence Panel in the US found out yesterday that Trump has ‘compromised security in his dealings with Ukraine and intimidated witnesses in its inquiry.
Thus, Trump’s seemingly calm attitude towards the eventual resolution of the China deal in conjunction with his implied readiness to deal with the issue after next year’s elections all seems to indicate his desire to alleviate internal pressure by moving the focus of his impeachment inquiry globally.
This will not be the first time in which he attempts to mix political issues with an economic agenda in order to gain leverage and political support internally. Case in point being his behaviour during the beginning of the trade war – you can read more about it here.
Meanwhile, the S&P 500 index tumbled with over 1.50 per cent this week owing to heightened trade uncertainty.
The index was due for a correction following the establishment of a classic 5-waves Elliott pattern.
If pressures continue to mount, the price is likely to continue tumbling. The first likely support is the price level at 3020.
S&P500 1D Price Chart. Image source: Trendsharks ©, created with TradingView.com
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