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On May 26, the White House stated that Trump is ‘displeased’ with China’s actions against Hong Kong and will respond to it very strongly, and China warned the US to stop interfering with its internal affairs. The tension between the US and China has never been so high, and experts are saying that not even Trump and Xi Jinping know when this will end.
Some say it is the “Second Cold War” since the two of the most powerful countries are fighting (economically) against each other. This “Trade War” started as a good-intended rivalry between the two countries in 2001 when China joined the World Trade Organization with strong support from the US. The intention of the US was to boost up the global economy (and the US obviously) by opening up the gate to China’s enormous market; however, little did the US know, China was crouching like a tiger and may have been waiting for this moment to rise. Unfortunately, the US economy had to go through 9/11, the subprime, and the financial crisis derived from it while China’s GDP was fast growing.
Things got real as of Jan 22, 2018, when Trump imposed tariffs on some of the imported goods. On April 3, 2018, China imposed tariffs of up to 25% on 128 US products, and on the very next day, the US unveiled its plan to impose 25% tariffs on Chinese imports worth $50 billion. What may have started as a ‘friendly’ rivalry turned out to be the “Trade War” as we know it.
On May 16, 2019, the tariff battle spread when Huawei, got banned from buying parts and components from US companies. The skirmish was slowing escalating and finally turned into a full-scale war when the outbreak of COVID-19 happened.
And now, blockchain is their new battleground. On May 20, 2020, Brett Guthrie, a republican and a congressman of the US, has proposed a new “Advancing Blockchain Act” which will set blockchain the US’s national strategy when Chinese government recently changed their tune towards blockchain development. Guthrie quoted “America is a nation of innovation and enterprise - and we need to keep it that way. We cannot let China beat us.”
The price for the power struggle between the two countries were paid by everyone; not just the ones in these two countries but the entire world since many countries rely on both of them. If Guthrie's bill passes, we can predict that their competition will amp up the world of blockchain and cryptocurrency. Another bull market might be waiting for us, and as a trader, it will be a good time to profit.
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