Trump Is Set to Elevate China Hawks, Deepening Beijing Rift
Published On Nov 12, 2024, 1:57 AM
President-elect Donald Trump is expected to appoint several key figures known for their hardline stance on China, including Senator Marco Rubio as Secretary of State and Representative Mike Waltz as National Security Adviser. These appointments indicate a likely continuation of Trump's tough rhetoric against China, which may lead to heightened tensions between the two nations. China has already shown signs of concern, as its stock market has reacted negatively to these developments. Economists warn that potential tariffs on Chinese goods could drastically affect trade, especially as China is trying to stabilize its economy amidst internal challenges. The sentiment around this situation appears to be impacting investments linked to China.
Stock Forecasts
SPY
Negative
With Trump gearing up to impose significant tariffs on Chinese imports, the relationship between the US and China appears set for further deterioration. Investors may look to sectors that are less reliant on China, such as domestic technology firms, or energy and defense stocks that might benefit from increased military spending and a focus on national security.
FXI
Negative
Investor sentiment around Chinese stocks is fleeting, as continued punitive measures and tariffs predictably harm their performance. Hong Kong stocks, for instance, are already experiencing downward pressure. The trend may continue, leading to further declines unless a diplomatic resolution is achieved. Investors should approach Chinese equities with caution.
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