00:00this is actually one stone, three birds scenario. The first bird is basically,
00:06is of course the coffer, right? You want to fill the coffer with additional money at the moment
00:10with the plan to cut tax, right? So basically, this is going to lead the government with a big
00:17budget deficit to fill. The second thing, of course, is to align with the U.S. immigration
00:26policy, right? You're going to tighten border control, reduce illegal immigrants. And of course,
00:32the third thing is basically to fulfill the campaign promise, right? Under the campaign
00:38trail, basically Trump promised that they're going to, the Republican body, if we elected,
00:44we're going to basically impose tariffs on those nations. These actions taken by the U.S. government,
00:52we're going to increase the overall economic uncertainty in the world. There are going to be
00:59quite some market volatility coming in because we understand that actually U.S. threatened
01:06the trading partners that if they retaliate, U.S. were going to impose even higher tariffs
01:12on those countries. So we may see a series of trade war and conflicts, and this may actually
01:18increase the world economic uncertainty. And actually, there will be some economic protectionism,
01:25trade protectionism coming in. Those governments already announced their retaliation measures,
01:30right? If U.S. further react to those retaliation measures, you will see basically a repeating
01:35games of kind of imposing tariffs among the trading partners. U.S. actually import a lot
01:42of goods in, for example, automobiles, consumer electronics, food and energies from the trading
01:48partners, the three trading partners, right? So now the tariffs basically make those companies,
01:56they import goods to the U.S., they need to pay additional tax, basically. And most likely,
02:01this additional tax is going to be passed to the consumers in the U.S., right? Average U.S.
02:05household is going to see their annual expense increase by about 2,600 U.S. dollars. 2,600 is
02:12a large amount, I would say, for an average U.S. household with 30 to 50 million, I'm sorry,
02:1830 to 50 thousand dollars of annual income. So this expense is going to be quite significant.
02:24And I would say this will also add to the inflation pressure in the U.S. So for U.S.,
02:28I think that's the reason why Trudeau says that the U.S. consumer is going to suffer.
02:32So if you look at those automobiles, right, being sold in the U.S. market, actually,
02:40a lot of those parts and accessories actually was imported from Mexico.
02:44Basically, U.S. car makers may consider basically reorganizing their supply chain
02:53and perhaps purchasing goods, parts and services from other countries, right? So this is going to
03:00have a big blow on the Mexican economy. And I would say if this is a repeat again, right, if
03:07Mexican retaliate and then U.S. impose an even higher tariff, then actually this would be
03:13significant blow, a significant impact on Mexico compared to U.S.
03:17Because U.S. is a much larger economy, China basically, the trade war may actually,
03:23in some sense, may be good because, you know, China is currently under deflation pressure.
03:29So this making the imported goods more expensive may actually,
03:34may in some sense, actually benefit the domestic manufacturers in China.
03:39So in a sense, it may actually help counter the deflationary pressure.
03:44So it may not be a very big kind of a blow to China, I would say, especially in the short term.
03:50But in the long run, if the conflict escalates, of course, the Chinese economy is going to suffer
03:55as well. I would expect China to retaliate against the U.S. by imposing also kind of a 10 percent
04:02tariff on Chinese, on U.S. imports. And China may actually, China has another lever.
04:07China may actually restrict export of rare earth metals to the U.S., which we're going to,
04:13because this is heavily used by technology companies and defense industries in the U.S.
04:18So this restriction of rare earth metals would be another lever that China could use.
04:23Previously, U.S. through these big alliances would be able to say a lot of things about
04:29about about the world economy. But now, given this national protectionism,
04:34given this segmentation, actually China may have more leeways, more strategic pathways to basically
04:41establish alliances with the EU, with Canada, with Mexico, etc. So I think, yeah, it would,
04:50yeah, things may play in a way that the world may be more segmented. There are more
04:56powers emerged, yeah. I would say the world is entering into a period of high uncertainty.
05:03We don't know what's going to happen, and the economic uncertainty is going to be high,
05:07stock market volatility is going to be high. And with this trade war, it will come with
05:13inflation pressures on all countries. Previously, we know before 2018, right,
05:18the world economies are getting more and more closely integrated, right? People are talking
05:22about global supply chain, the global economy. Basically, we are all citizens of the earth.
05:28But now things are totally different, I would say. Now, the world economy becomes more and
05:33more segmented. And this trade war, these mutual blows of tariffs against each other...
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