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Is China Playing North Korea’s Cards with Trump?

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North Korea and President Trump

In February, President Trump went to Hanoi, Vietnam, for a second meeting with President Kim Jong Un. In the meeting, North Korea was expected to sign a deal with the US on denuclearization. Before leaving for the meeting, President Trump was optimistic. In a tweet, he said, “looking forward to a very productive Summit!” However, the summit didn’t go well. According to President Trump’s statement after the meeting, he had to walk away without a deal. North Korea wanted “the sanctions lifted in their entirety” which wasn’t acceptable to President Trump.

US-China trade negotiations

The US-China trade talks started in the first week of December 2018. President Trump and President Xi Jinping agreed not to impose new trade tariffs for 90 days. So far, the countries haven’t reached a deal. Last week, many reports suggested that the negotiations are in the final stages.

On May 3, China “undermined core U.S. demands” that were discussed during the negotiation process between the two nations, Reuters reported. President Trump warned China about an increase in the tariffs on Chinese imports into the US from 10% to 25%, which attracted a retaliatory warning from the Chinese Commerce Ministry on May 8.

US and Chinese businesses

China seems to be playing the same game that North Korea played before meeting with President Trump to sign a deal in February. However, another escalation in the US-China trade war would hurt US companies like Apple (AAPL), NVIDIA (NVDA), Micron (MU), Ford (F), and General Motors (GM). More tensions would also impact many multinational Chinese businesses like Alibaba (BABA). Alibaba, which is currently pushing to expand its global presence, could face troubles due to the US-China trade war.

General Motors and Ford have already started seeing the negative impact of the ongoing US-China trade war. Apple, Micron, and NVIDIA expect prolonged trade tensions to impact their future outlook. JD.com’s (JD) CEO, Richard Liu, predicted in June 2018 that many US companies would face troubles due to the US-China trade war.

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