China hits US economy
On May 13, the United States stock markets experienced a solid, juicy, synchronous fall. S & P 500 - 2.41%, Dow Jones - 2.44%, NASDAQ - 3.31%. To do this, it took exactly one statement from the government of China - on the introduction of duties on a whole range of American goods: 5 thousand items with a trade volume of $ 60 billion a year. For half of the products from the list, this increase is from 10% to 25%, for a thousand more - from 10% to 20%, for the rest - from zero or a symbolic percentage to 5 and 10%.
In general, if you keep the volume of imports, suppliers will cost about $ 10 billion, but a decrease in indices immediately led to even greater losses. So, 3.31% of NASDAQ is about 260 billion dollars. Who were on the eve of the American economy, and now they are gone. Which, by the way, says about the senselessness of the stock market as such, but we are not talking about that now.
Recall, on May 10, the US government raised duties on Chinese products with a total export value of about $ 200 billion a year from 10% to 25%. In fact, these are economic sanctions imposed on a completely level ground. The increase was announced a long time ago, and for a long time it seemed that this would remain a threat, a subject of political bargaining, but Beijing did not bend at this bargaining, so that the Trump's clock mechanism docked until the explosion.
China got hit. But it struck back. And although the amount of goods under Chinese decree is three times less, it should be remembered that exports from the United States to China are not much less than the flow of goods in the opposite direction. Increased duties will begin to operate from June 1, American exporters do not have time to change the strategy.
From this we can conclude:
First, China can easily manipulate the US stock market. A government decree was prepared for more than one day, and dedicated insiders could, through front brokers, sell their blocks of shares in order to buy them a day later at 2.5% cheaper. Trifle? Microfinance players, too, powder the brains of their customers, talking about the little things. Meanwhile, 2.5% per working day, even without the accumulation of compound interest, is 625% per annum. It is clear that every day it is impossible to shake the market, but in any case, China has the opportunity to receive money from nowhere. Russia can influence the NASDAQ in such a way except with a nuclear attack on some stubborn neighbor - we can only influence the hydrocarbon market with economic methods.
Secondly, any country for which export to China plays a significant role can fall under the Chinese blow. Of course, the Chinese will not shoot themselves in the leg, giving up vital goods, but they are quite able to increase the necessary reserves in advance, and then introduce duties. The largest suppliers to China - South Korea, USA, Japan, Germany, Australia. The United States has already felt the significance of the restrictions, the rest of the countries are dying, without complexes of world supremacy, but if the United States embroiled them in the sanctions war, as they are trying to do this in Europe with Nord Stream-2 right now, a similar “return flow” can arrive.