Cryptocurrencies To Benefit as Trump’s Trade War Intensifies

The US is set to impose additional tariffs against multiple countries in the coming days. The latest one is set to go live today which will impose additional tariffs of $34 Billion for products imported from China. China has also threatened to retaliate by adding tariffs of $34 Billion on American imports. To this, Trump has vowed to add $200 Billion tariffs if it happens.



US’s trade war is not just with China. Trump has also threatened the EU with more Tariffs. If that goes through, the EU is already ready with a new set of duties for American products worth approximately 18 Billion Euros.The US has already imposed additional taxes on Indian products. India has now responded with $231 Million tariff hike on 30 US products.

The global economy is at a low, with multiple currencies at their lowest point. Indian Rupee, for the first time in 5 years fell down below Rs. 69 last week. Chinese Yuan has also taken a substantial hit. Yuan has fallen down by 10% since April 2018 after Trump announced the tariffs. Shanghai Stocks have also gone down by 25% in 2018 alone.

Cryptocurrencies thrive when countries battle uncertain economic policies. Bitcoin saw a significant uptick when Brexit happened last year. Similarly, Chinese traders flocked to cryptocurrencies when the Yuan was devalued a few years ago. However, this time around the Chinese government has banned the trade of cryptocurrencies. But the trade still continues, in a peer-to-peer, OTC manner instead of exchanges.

As The US goes on a trade war with multiple countries, the value of national currencies are expected to come down, including the US dollars. Investors are going to look for alternate ways to store their wealth. Traditionally, precious metals like gold and silver have been used. But acquiring gold is not easy. Once acquired, it is even harder and expensive to securely store them.

Cryptocurrencies, especially Bitcoin is often referred to as digital gold. It is scarce. The total supply of Gold is unknown. But the total supply of Bitcoin is fixed at 21 Million. Securing Bitcoins is also as easy as securing a tiny hardware wallet. It takes a good while to move Gold from one country to another. Bitcoin, on the other hand can be sent instantly for a tiny fee. Just last week, $500 Million worth Bitcoin was transferred for just $2!

Cryptocurrencies are extremely volatile. So we may not see investors go full on cryptocurrencies yet. However, smart investors with an appetite to diversify have been actively investing in Bitcoin and other cryptocurrencies. It is set to increase as economic instability impacts multiple countries from the trade war that the US has just started.


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Author: Vignesh S
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Trade War Fears Between China And U.S Boosts Crypto Market

Crypto market gains $16 billion today as economic fears over an imminent trade war between global superpowers US and China, drives investors towards decentralized assets


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US President Donald Trump’s latest response to levy a further tariff on a further $200 billion worth of Chinese imports, has created widespread fears of an imminent trade war.

The escalation between Washington DC and Beijing’s tit-for-tat tariff war has been triggering widespread uncertainty throughout both nation’s financial markets, with the Nasdaq COMP index, S&P-500, Shanghai Composite and Nikkei 225 index all suffering losses today.

“The trade relationship between the United States and China must be much more equitable,” President Trump said. “The United States will no longer be taken advantage of on trade by China and other countries in the world.”

This political posturing sparked off last week when President Trump decidedly slapped a trade tariff on $50 billion worth of Chinese imports, in a bid to compensate the United States for what he believed to be years of alleged Chinese intellectual property theft. The far east responded in kind and threatened to place a like-for-like tariff on all US imports into China unless the new punitive tariff was removed. In an attempt to strong arm the opposition, President Trump fought back by asking U.S. Trade Representative Robert E. Lighthizer, to draw up a list of $200 billion worth of Chinese products that they can attach a further tariff to, including an additional $200 billion worth if China retaliates.

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Overall the potential tariff charges could hit $450 billion worth of Chinese products entering into the US, which is likely to spill over into the working classes and create havoc for the citizens of both economies.

Meanwhile amidst this trade war, the geo-political unrest has directed a surge of capital back into the global crypto market, as individuals on both sides of the pacific withdraw into decentralized virtual assets to protect their interests. The global market capital has enjoyed a $16 billion increase in the last 24hrs and is looking promising to retrace back towards $300 billion, as US and Chinese stock market FUD increases.

On the Bitfinex exchange, BTC/USD trading pair is currently accounting for nearly 5% of all Bitcoin trades today, as investors buy into BTC to hedge against the falling US dollar market.

It’s likely that as this war continues between the two superpowers, smart investors will seek to leverage this opportunity to make profits; taking advantage of fact that both the traditional financial market and the crypto market operate on completely separately plains.

This means that the crypto market could continue to improve as tensions rise and international trade concerns deepen, lifting the digital assets out of a long bearish period.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author Ollie Leech
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Donald Trump’s double threat to global free trade

Sitting grandly on the banks of Switzerland’s Lake Geneva is the headquarters of the World Trade Organization (WTO), a free trade factory.

Here the world’s nations meet to hammer out trade deals and reduce tariffs – taxes charged on imported goods.

But the system, which has been working in various guises since the 1940s, is under threat from two sides.

The USA has announced tariffs on imports of foreign steel and aluminium on the grounds of national security, and it is refusing to appoint new members to the WTO’s appellate body that settles disputes.

These developments come as the WTO is of increasing importance to the UK. At the moment it is represented by the EU, but after Brexit the UK will negotiate on its own account. This should give the UK the ability to negotiate deals more specifically designed to suit it.

The downside is that the UK will no longer belong to the biggest single trading economy in the world – the EU.

Brexit consequences

The first job of the newly increased UK team at the WTO will be to negotiate a “schedule”, an extensive list of goods, and the tariffs to be paid on them; ranging from avocados to zips.

The UK assumed it could just inherit the EU’s schedule. The trouble is that this requires the consent of other countries, and some of them have said no.

Take New Zealand, for instance. At the moment it can sell 228,000 tonnes of lamb and mutton to the EU every year, with no tariffs. The UK and the EU decided to split that quota between them, but New Zealand objected.

David Walker, is New Zealand’s ambassador to the WTO: “Yes, we and a range of other WTO members made clear that a simple quota split like that is not acceptable to us.”

The reason is simple. At the moment New Zealand can sell that lamb anywhere in the EU, so it loses flexibility if it has to sell some in the UK and the rest of the EU.

The UK can probably get round such problems, by offering countries like New Zealand a better deal. But there are other clouds on the horizon. For a start, the WTO hasn’t managed to negotiate a global cut in tariffs for decades for one simple reason – every single country has a veto.

Ieva Barsauskaite, from the Lithuanian delegation to the WTO, warns me that getting all 164 countries on board is not easy.

“Get 164 friends of yours to one place, decide on a dinner, decide on one dish for all, and include the single mothers, the teenagers, retired veterans and everyone with a dog, and people with allergies – that’s how the trade deals are being made here,” she says.

For the UK, which is hoping to breathe new life into the WTO, that is not very encouraging. But there are bigger problems.

Trade war threat

Donald Trump’s decision to impose tariffs on steel and aluminium is a game changer, not because this hasn’t been done before – it has. But because he has done so on “national security” grounds – the one WTO rule that cannot be challenged.

All countries can take actions to guarantee their national security, but are only expected to do so at times of real crisis, like a real war.

But now in peacetime, President Trump has cited national security as a reason for tariffs. If others follow suit the escalation could be impossible to stop or reverse.

The risk is that a trade war could trigger an economic recession, says WTO boss Roberto Azevedo
No wonder that Roberto Azevedo, the WTO’s director-general, is worried: “Just the threat of a trade war is already damaging,” he told the BBC.

“But if this escalation goes on, and on, and on, you may have something very, very damaging – even the possibility of a recession. And if you look back in history, you know, in the 1930s, that’s exactly where it led.

“That is why I have been saying, ‘stick to the rules, do things according to the rules’, because if others don’t like it, there are mechanisms to take care of that,” he says.

No appeal court

But those mechanisms themselves are also now under threat. The WTO’s appellate body has been solving problems for more than 20 years, and its decisions have to be accepted by all members of the WTO. There is no veto.

But the appellate body is rapidly running out of members, as the US is blocking new appointments in an argument over their role. It needs a bare minimum of three members, though six or seven would be much better – at the moment it has just four.

“For over a year, it’s not been possible to get a consensus amongst members to initiate the process for filling vacancies,” says the WTO’s director of legal affairs, John Adank.

“So, if this impasse continues, the risk is that the appellate body won’t be in a position to function, because if it gets down to three or fewer members, it could be difficult to hear appeals.”


 

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author Jonty Bloom 

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