“Move my fingers, wipe out half of Chinese investors,” said one popular meme circulating on Chinese social media Monday, showing Trump as Thanos, the ultimate bad guy from the Avengers series.
The apocalypse-themed “Avengers: Endgame” is breaking box office records in China and the United States and is clearly influencing reactions to the latest phase of the long-running U.S.-China trade war.
“Trump led to global panic with his Thanos-like presence,” said another post on the social network Weibo, showing Trump with one real hand and one jewel-encrusted metal hand like the movie villain’s.
Trump is credited with triggering the sharpest fall in Chinese stock markets in more than three years Monday, after threatening to increase tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent on Friday and to levy a new 25 percent fee on the remaining $325 billion of Chinese “untaxed” imports “shortly.’’
Trump reiterated his threat early Monday morning, Washington time. “The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade,” he tweeted. “With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!”
The Shanghai Composite Index fell 5.58 percent, and the Shenzhen Component Index tumbled 7.56 percent. The tightly controlled Chinese currency dropped to a four-month low after Trump’s surprise tweets.
“Go have a look at the Chinese stock market, I smashed it,” read another popular meme on Chinese social media, this one showing Trump in normal attire and with a smug look on his face.
Investors were taken by surprise after both sides had signaled that they were close to reaching a deal to end their protracted trade war.
American trade negotiators were in Beijing last week for talks that Treasury Secretary Steven Mnuchin described as “productive,” after Trump last month said they were forging a “monumental” and “epic” deal.
A 100-member Chinese delegation is due in Washington on Wednesday, and Trump’s sudden combative tone sparked speculation that President Xi Jinping might call off this week’s talks.
But a Foreign Ministry spokesman said Monday that the Chinese delegation was set to travel as scheduled. “The Chinese team is preparing to travel to the U.S. for the trade talks,” Geng Shuang told reporters, saying that Trump had made many similar threats before.
Chinese state media did not run stories about Trump’s tweets until after the local markets had closed and until the authorities were ready to give their reaction.
“China’s position is always clear-cut, and U.S. knows that,” Geng said at the Foreign Ministry’s regular press briefing, describing recent rounds as making “positive progress.”
“We hope the U.S. and China will work together to reach a mutually beneficial treaty on the basis of mutual respect. This is not only in the interest of China, but also the interest of the U.S., as well as the aspiration of international community,” he said.
However, Geng did not specifically answer when asked whether Liu He, the vice premier who has led the Chinese negotiating team, would travel to Washington or whether lower-level officials would go.
Chinese officials have become accustomed to the American president’s “dramatic zigzags,” said Shi Yinhong, professor of international relations at Renmin University in Beijing.
“China’s leaders have become more accustomed to Trump’s approach, although it’s very difficult to get used to Trump,” Shi said, adding that the American president appeared to be all about grandstanding and claiming political victories.
“One motivation could be so that Trump can say to the American domestic audience that he fixed China and forced China to make major concessions,” he said, describing this as an “illusion.”
The pain of the tariffs has been limited so far, given that much of the cost is passed onto American consumers, but if the trade war rumbles on, and especially if tariffs increase, this could have a sizable effect on China’s slowing economy.
Tariffs of 25 percent on all Chinese exports to the United States could shave as much as two points off China’s economic growth — forecast to be between 6 and 6.5 percent — over the following 12 months, UBS economist Wang Tao wrote in a note to clients.
Even if the United States only increased the tariffs on $200 billion in Chinese goods, it could still knock half a percentage point off the annual growth rate, she wrote.
“If tariffs are hiked this Friday and new tariffs come soon after that the biggest negative impact will likely occur in the next few months,” she wrote, suggesting the central government would embark on more infrastructure spending and issue more debt to cushion the blow.