📈 Chinese Trade War is On...

Here's what's important to understand.

Trade War Heating Up

We received news yesterday that the US would be levying a whopping 104% tariff on Chinese goods entering the US.

Here’s a quick summary of how tariffs have evolved with China:

• February 2025: Trump administration increases tariffs on China by 10% (was ~20%).

• March 2025: Trump administration tacks on an additional 10% tariff.

• April 2025: China retaliates, levying a 34% tariff on American goods.

• Yesterday: Trump adds an additional 50% tariff (bringing the total to 104%) on China.

Impacts to Chinese Economy

Because the US imports a lot more from China than China imports from the US, the trade war will disproportionately impact China.

Below you can see the sectors that will be hit the hardest for China:

This means that China will have to find other countries to make up this lost volume on - which will be extremely difficult for them.

As a result, we’re seeing Chinese names come in heavily:

Some of these names - JD especially - are getting interesting because they’re approaching book value, which should become a support level.

Additionally, the current tariffs aren’t feasible - and the US and China have no trade relations also isn’t feasible.

For a look at how I am trading this, watch this video: