The United States and China have been embroiled in an economic tussle for a while now. The two countries had individually announced a significant increase in tariffs on goods from each other and this disagreement has had effects on the economies of both countries. The effect could also be seen on Bitcoin because as it was said that the coin may have risen at one time as a result of all the doubt and uncertainty. Chinese business people had begun to shift from the Yuan and focus on Bitcoin because, at the time, they were afraid that the Yuan would take a significant hit from the trade war.
A new development might change the course of the disagreement between the two nations as President Donald Trump surprisingly announced on Saturday, that he would be putting aside his plans to tag China with another $300 billion in tariffs. Negotiations between both countries would therefore continue and is expected to yield more fruits regardless of Trump tweeting that
“there will be no reduction in the Tariffs currently being charged to China.”
Bitcoin is Unhurt by the Announcement
The co-founder of Fundstrat, Thomas Lee, has said that Bitcoin is largely unaffected and “seems to be OK with developments”. Further explaining on Twitter, he also said that the
“easing of tensions with US and China and even the surprise of easing restrictions on Huawei does not seem to be hurting Bitcoin.”
At this time, Bitcoin is at $11,802 and its market cap has again surged past $200 billion to almost $210 billion.
Trump Eases up on Huawei
After the meeting with Chinese President Xi Jinping, Trump also announced the restriction placed on Huawei Technologies Co;, would also be put on hold. This means the Chinese multinational technology company can now continue a business relationship with the U.S. market as U.S. manufacturers can also continue selling manufactured electronic parts to the Chinese giant, except in cases where such electronic equipment would affect national security.
According to Trump:
“U.S. companies can sell their equipment to Huawei. We’re talking about equipment where there’s no great national security problem with it.”
Effect on the Market
Since it’s the weekend, the general effect of the news would be uncertain until markets officially resume on Monday. It is however very possible that the news would be great for the markets and a windfall should probably be expected. Even though the development came as a surprise to most people, it’s safe to think that the surprise is pleasant and the Dow, S&P and others would most likely reflect this.
Before the week ended, major stocks rose significantly as investors were sure that Trump would not end the meeting with a worsened relationship than when it started.
At the moment, most investors and traders in traditional markets are positive that things would change for the better and the Trump announcement is good news. However, everyone might need to keep at the back of their minds that the trade war has only been doused but hasn’t been completely ended. Generally, there still is a lot of uncertainty not just in the U.S. but also with the rest of the war.
There is also the problem with Iran and it has been noted that the Director of the CIA, the U.S. Secretary of State and also the National Security Advisor are in favour of the war which is as a result of the tensions which began after Iran’s defense shot down a U.S. Navy RQ-4N Global Hawk spy drone. Whether all of this would affect the U.S. or Bitcoin, only time will tell.