The U S China Trade War Escalates: Xi's Next Move Could Shake Global Markets

The U S China Trade War Escalates: Xi's Next Move Could Shake Global Markets

The U.S.-China Trade War 2.0 is likely to intensify, with Xi Jinping’s response potentially different from previous tactics. While China previously relied on measured approaches like product rerouting and transshipment, this time, Xi may adopt a more aggressive stance. China could retaliate with a sharp yuan devaluation, aiming to neutralize U.S. tariffs. Additionally, Xi might impose reciprocal tariffs, target U.S. companies operating in China, encourage nationalism, and leverage supply chains, particularly in sectors like rare earths and green energy. Xi’s response reflects his strengthened power and commitment to safeguarding China’s economic interests, with the potential for disruptive countermeasures in critical industries.

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