Trump is making investors more cautious and nerves are wrecking what China will do next. The country has asked for sanction on the US from the WTO
US futures and European markets are trading lower following the track of Asian markets. Not much has changed when it comes to markets, the focus is still on trade war and China is at the forefront of this. It is another risk off day today and traders are worried about the consequence of the news that China will be making a complain to the World trade Organisation to impose sanctions on the U.S.
U.S has strengthen its position when it comes to the complains outcome with the WTO but this time the complain is coming from China and the WTO would have to listen to this more carefully. It will be really intriguing how the WTO handle this complain because Donald Trump has already threatened many times to withdraw US from the WTO.
The net effect of this is on the dollar index which is picking up more momentum and gained more strength. The strength in the dollar index would become troublesome for the US economy if this continues at this pace, the country’s economy will suffer and there will be no easy way out of this mess. Trump would up the ante by blaming other countries that they are manipulating their currencies.
The current trade war is making the US’s closed ally to rebel against the country. We have seen this wave picking up more momentum and other major countries like China, Germany, France are busy in strengthening their relationship with Russia. President Xi Jinping, already said during his speech at Eastern Economic Forum in Russia that the country’s relationship with Russia is at all-time high. His message was clear that his country is ready to study other relationship and work on different projects with them. Putin just added more fuel on the fire during the conference and criticised those countries who favour protectionism- a direct hint to US.
Trump needs to change his attitude or the US will become the biggest loser of this trad war. This ready to go kind of behaviour, which is a threat that the US is ready to impose more sanctions on China because it is not agreeing the way that the US wants to have the deal will not work. In fact, we think that we are moving fast toward a moment when the US will lose all of its control because other countries will have much stronger position because working together.