Why Chinese Stocks Tumbled Today
Chinese stocks have proved mostly resistant to the chaos in U.S. markets around the coronavirus pandemic as China's economy is largely returning to normal following an earlier outbreak of the virus. But today, Chinese stocks were rattled by a broader earnings-driven sell-off in the U.S., and as President Trump renewed his trade war with China, calling for tariffs in retaliation for the virus.
News reports revealed that the Trump administration is considering multiple tactics to punish China for being the origin of the virus and to use the country as a scapegoat in his reelection campaign. Among the tools the administration is considering are sanctions, cancellation of debt, and a new round of tariffs. Trump aides are also seeking to prove against evidence that the virus originated in a lab in Wuhan.
Prior to the coronavirus, the trade war between the U.S. and China had been one of the biggest factors influencing Chinese stocks, and renewal of Trump's threats could further destabilize the global economy and weaken China's recovery from the pandemic.
Source Fool.com
