It is actually worse than that for China. The tariffs have been pressing for a good ten months for China and i do not think that they are actually sustainable. This is actually the right time to ratchet up the tariffs and pressure.
The real horse trading has begun.
Of course, one can counter just how smaller - and far less relevant - the Chinese stock market is in comparison to the S&P500, which is also the basis for the vast majority of household net worth for Americans, and global investors (whereas in China, it is the local housing that is far more critical and accounts for roughly 70% of household net worth).
But it's not just the stock market that shows why China should tread very lightly in its ongoing negotiations with Trump, or why the US president has decided suddenly to re-escalate. Below we lay out [ ] charts showing just why the US indeed continues to have the upper hand in negotiations with China, starting with the relative importance of the US and European economies to China rather than vice versa.
The message was clear: Trump isn't backing down from his threats to hike tariffs and impose new ones, even after sending global markets into paroxysms with a series of tweets on Sunday.