Trump seeks to revive tough-on-China image with markets remark
DONALD Trump signalled he would again make his stance on China a key part of his United States presidential campaign strategy, drawing an unsubstantiated correlation between turbulence in the nation’s equity markets and his runaway Iowa Republican caucus victory.
While a gauge of US-listed Chinese stocks retreated on Tuesday (Jan 16), shares traded in mainland China rose. Recent weakness in the country’s markets has more to do with domestic concerns than Trump, according to Willer Chen, an analyst at Forsyth Barr Asia.
Yet Trump drew from his familiar playbook of attributing the ebb and flow of markets to his policies and actions.
“I felt very badly for them. China had a crash yesterday in their stock market. You know why? Because I won Iowa,” Trump said on Tuesday night while campaigning in New Hampshire, the next state in the Republican nomination calendar.
“Literally, as soon as those numbers started coming in yesterday, they had a crash – of big – one of the worst numbers that they’ve had in years.”
The boast gave investors and voters a glimpse of Trump’s trade doctrine should the public return him to the White House in the November election. His first term was marked by a tit-for-tat trade war that he engaged in with Beijing.
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For a second term, Trump has floated the idea of encircling US industry with a 10 per cent tariff, which would bring a fresh wave of disruptions to supply chains.
“I love China. I love everybody but they can’t take advantage of us,” Trump said. “That tells you what it’s about. If I get in they know it’s not going to be so good for them.”
The Nasdaq Golden Dragon China Index, a gauge tracking Chinese companies listed in the US, fell 3.8 per cent overnight to its lowest level since November 2022. Chinese electric vehicle maker Nio and Internet giant Baidu were among the biggest losers. The benchmark CSI 300 Index of Chinese-listed shares rose 0.6 per cent, paring its decline over the past 12 months to 21 per cent.
“It’s very Trump style,” Chen said. “Personally, I don’t think the drop is related to that. It’s more about China market’s own problem, I would say. But Trump for sure would love to link that to his victory.”
Trump’s campaign event in Atkinson, New Hampshire came a day after he scored a resounding victory in Iowa, well ahead of his two chief rivals, Florida Governor Ron DeSantis, who came in second, and former South Carolina Governor Nikki Haley who finished in third.
The Monday caucus win takes Trump one step closer to seizing the Republican nomination, with polls also showing him leading in New Hampshire, though by a smaller margin than in other early voting states.
Trump’s commanding grip on the GOP presidential race has other nations worried about his possible return to the White House and the consequences it could hold for the rest of the world. A Trump victory could usher in changes for US policy on trade, taxes and security. BLOOMBERG
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