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Trump-China Tariff Conflict and U.S. Economic Fiscal Deficit Outlook Summary

1. President Trump’s Warning and Market Reaction

President Trump strongly pointed out on Friday that China violated the agreement.
He declared that he would “stop playing the nice guy,” raising the possibility of imposing tariffs.
This has renewed concerns about trade conflicts with China.
In the market, the stock market fell despite good PCE indicators.

2. Secretary Basset’s Interview and Discussion on China Relations

In an interview on Sunday, Secretary Basset started talking about China.
In response to the host’s question, he replied, “It’s a process of reducing dependence on China.”
He emphasized the problem of dependence on China in semiconductors, pharmaceuticals, etc., revealed during the COVID period.
He doubts China’s credibility based on its attitude toward India and Europe.

The host asked, "Whether Trump and Xi Jinping will have a phone call,"
Basset mentioned the possibility of resolving the issue through a phone call between the President and Xi Jinping.
He raised the possibility of communication errors regarding the method of signing through proxies.

3. JPMorgan Chase CEO Dimon and Assessment of China’s Response

JPMorgan Chase CEO Dimon said that China does not fear the United States.
He assessed that China will deploy 100,000 engineers if necessary to solve problems.
Basset countered that China cannot escape economic laws and the law of gravity.
He ultimately presented the logic that the basic principles of economic reality are the same for all countries.

4. Impact of Tariffs on Retail and Prices

Major retailers such as Best Buy and Walmart have raised concerns about price increases.
Basset predicted that the tariff burden is likely to be mainly passed on to Chinese manufacturers.
Limited price increases or inventory shortages may occur in some items.
In the case of Walmart, it said it would respond according to the situation, such as reducing inventory or slightly increasing prices.

5. U.S. Fiscal Deficit and Controversy over Additional Tax Cut Security

The host mentioned the risk of default regarding the passage of the tax cut security bill.
Basset strongly refuted that the United States would not default, and that concerns about the fiscal deficit were exaggerated.
Regarding JPMorgan Chase CEO Dimon’s warning of a bond market crisis, he explained the effects of improving the U.S. financial structure and increasing tariff revenue.
Basset assessed that the problem can be solved institutionally, and the long-term fiscal improvement outlook is clear.

6. Comprehensive and Future Prospects

Currently, the core of the conflict between the United States and China depends on the phone call between Secretary Basset and Xi Jinping.
President Trump’s hawkish remarks and Secretary Basset’s explanation have highlighted various economic issues such as tariffs, retail prices, and fiscal deficits.
In the end, it is expected that the issues will be resolved through dialogue and working-level discussions between the two sides,
Focusing on improving the U.S. economy as a whole and making careful policy adjustments.

Major issues such as Trump, China, tariffs, the U.S. economy, and fiscal deficits are acting in a complex manner.
On Friday, President Trump hinted at imposing tariffs on the grounds of China’s violation of the agreement,
Secretary Basset explained in an interview that it was a process of reducing dependence on China,
Revealing the possibility of resolving the issue through a phone call between the President and Xi Jinping.
Even with JPMorgan Chase CEO Dimon’s mention of China’s responsiveness,
Basset argued that the basic principles of the economy are the same for all countries.
The rise in retail prices due to tariffs is expected to be limited,
It is assessed that concerns about the U.S. fiscal deficit will be resolved through structural improvements.

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Tariff Conflicts, Hidden Economic Opportunities Within

*YouTube Source: [Maeil Business Newspaper]

– [홍장원의 불앤베어] 베센트도 ‘이것’만큼은 차마 부인할 수 없었다

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