On "What's Moving Your Money with Spencer Hakimian," Spencer discusses the new progress in the U.S.-China trade war, and what may come next.
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00:00Overnight, we had major breaking news between the United States and China.
00:05We are finally getting to a detente.
00:07We are finally seeing these two countries extend olive branches towards one another.
00:14And on this episode, if you stay tuned, we're going to cover all of it and what the next steps are.
00:20And if you guys have been watching, I was predicting this for months.
00:24So if you want my next predictions, just stick around.
00:27Hey, everyone, I'm Spencer Kim in and welcome back to another episode of What's Moving Your Money with Forbes.
00:33And on today's episode, let's cover everything that has happened between the United States and China.
00:39The real politic, the jawboning, what this means for markets, what this means for the economy and more.
00:45Stay tuned.
00:46So overnight, we got news that China has agreed to begin purchasing soybeans from the United States yet again.
01:00Now, this was heavily symbolic and heavily emblematic of the times that we are living in.
01:07China has agreed to do this as Xi and Trump meet in Asia this week.
01:13And why did China decide to do this at this time?
01:16Well, because this is becoming an explicit political problem here in the United States.
01:21Soybean farmers are not a big part of the overall economy, but they are a very powerful political faction because of where they're situated in the country.
01:30Wisconsin, Iowa, Indiana, Ohio, you name it.
01:34So as these things continue to progress, you can expect both sides to give a little here and there to one another in order to make some progress.
01:43China got what they wanted in a very big way in exchange.
01:47Rumors came out that Trump is considering letting NVIDIA sell to China the most cutting edge chips.
01:55That is China's holy grail.
01:57That is what China wants.
01:58China wants access to NVIDIA's chips to build out its own technological center.
02:03The only leverage point that the United States still has over the Chinese is the fact that NVIDIA and Silicon Valley is oftentimes making stuff that China simply cannot make yet.
02:17That was why DeepSeek was such a big deal back in January.
02:20Because if China can break out of this American technological chokehold, God knows what's next.
02:26God knows what's next if they really don't need the Americans anymore.
02:30So this goes on.
02:30Another thing that was agreed upon by both sides was that China would promise to send less fentanyl precursors into the United States in exchange for a heavy reduction in Chinese tariffs.
02:43And why that's almost silly is we've been asking China to do this since 2018.
02:49If they could do this, they probably would do this.
02:52They either don't want to or they just can't.
02:54What is to say that if they didn't do that with all those tariffs in place, that reducing those tariffs would actually make them compliant?
03:02It doesn't make any sense.
03:03China was not changing their behavior because of the tariffs.
03:07So in order to incentivize their behavior to change, you're going to lower the punishment and hope that they somehow change?
03:14I don't understand.
03:15This doesn't really make sense.
03:16It's like parenting 101.
03:18If a kid is misbehaving and they continue misbehaving, you don't take away the penalty for that.
03:24If anything, you may have to make it a little bit higher in order to get them to change their behavior.
03:29Guys, we're in this complicated situation right now where the United States and China have both essentially realized this trade war has to end.
03:36It's not sustainable for either side.
03:39It's hurting Chinese profit margins.
03:40It's hurting inflation in America.
03:42It's hurting consumers in America.
03:44So one way or another, you can expect a massive de-escalation in China-American trade tensions this week as Xi and as Trump meet.
03:54And keep in mind that as they meet, I will be doing breaking news coverage here on Forbes of the meeting.
04:01You never know how these things go.
04:02Yes, we can talk.
04:03We can analyze.
04:04We can discuss.
04:05We can predict.
04:05But at the end of the day, these are just two human beings just like you and I meeting in a room together.
04:10Emotions will be high.
04:12People can say things that take the other side off.
04:15You don't know how these things actually go in reality.
04:18With that being said, I want to thank you guys for watching.
04:21And I hope you guys can like, comment, and subscribe.
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