In its intensifying trade dispute with Washington, Beijing believes it has found a key point of U.S. vulnerability: President Trump’s obsession with the stock market, according to people familiar with Chinese policy discussions.
The Wall Street Journal with the report:
Chinese officials, including President Xi Jinping, are reportedly convinced the U.S. economy cannot withstand a prolonged trade war without sharp market losses. They view Trump’s heavy reliance on market performance as a political gauge, expecting that sustained financial turbulence could pressure him into concessions.
Beijing’s firm stance reflects that belief: Chinese negotiators have held their line since the April selloff that followed Trump’s announcement of “Liberation Day” tariffs, when markets tumbled after China’s immediate retaliation.
According to those briefed on China’s strategy, Xi is betting that the threat of another market downturn will ultimately push Trump to seek a truce at an expected summit between the two leaders later this month.
—
The report underscores China’s confidence in sustaining its trade stance, suggesting any further tariff escalation could hit U.S. equities. Markets may react nervously if rhetoric intensifies ahead of the planned Xi–Trump summit.
Gotta say … thinking that Trump will fold is not exactly a revelation insight. Everyone’s been calling TACO since April!
This article was written by Eamonn Sheridan at investinglive.com.
