EDITOR NOTE: In a recent briefing with reporters, President Trump said that if China moves forward with its new resolution on Hong Kong, one allowing it to punish political dissidents with impunity, such an attempt would be met with a “very strong reaction” from the US. What gives the US the right to interfere with China’s internal politics? Aside from that, however, we might first ask if President Trump is being serious, or if his belligerent statement might be nothing more than a rhetorical ploy aimed at his core supporters--a mere display of American power (read: entitlement) on the global stage.
Did President Trump just crank the belligerent rhetoric up to '11'?
During a briefing with reporters, President Trump answered questions about the MSM fixations du jour, including his feelings on mail-in ballots and his current COVID-19 infection status (still negative). But amid the fluff, one reporter asked an important question referencing Thursday's decision to adopt a new "national security" resolution opening the door to new laws allowing Beijing to punish political dissidents with impunity.
Trump replied that if this happens, the US would respond with a "very strong reaction." You'll remember that last year, President Xi warned in a speech that any foreign powers who screwed with China's relationship with Hong Kong and Taiwan would face serious consequences.
A few hours ago, Chinese tech giant Baidu became the first major Chinese company to delist from an American exchange (it de-listed from the Nasdaq) in retaliation against a bill passed by the Senate that would require Chinese companies to submit to certain auditing conditions that Beijing currently resists, for dubious reasons.
With the WHA agreeing to an "independent" investigation of China's early response to the coronavirus, and President Trump embracing increasingly belligerent rhetoric as his administration pins its reelection hopes on vilifying China as an ascendant American foe that effectively - even if inadvertently - unleashed a potent biological weapon on the world, investors including David Tepper have said they see a tail risk of an armed conflict between the world's two largest economies.
Fortunately for the Fed, investors haven't really woken up the possibility yet.
Originally posted on ZeroHedge