Trade war 2.0? Bipolarity returns , this may be what is spooking the market!
Didn't I tell you that as long as Trump is in office, expect great volatility.
I have never seen, in these past weeks, the ASX falling close to 4% and staying there throughout the morning ....oh we have just entered May. US explores ways to punish China over COVID-19 Jeff Stein, Carol D. Leonnig and Josh Dawsey
May 1, 2020 – 11.05am
Washington | Senior US officials are beginning to explore proposals for punishing or demanding financial compensation from China for its handling of the coronavirus pandemic, according to four senior administration officials with knowledge of internal planning.
The move could splinter already strained relations between the two superpowers at a perilous moment for the global economy.
Senior officials across multiple US government agencies are expected to meet on Thursday (Friday AEST) to begin mapping out a strategy for seeking retaliatory measures against China, two people with knowledge of the meeting said. Officials in American intelligence agencies are also involved.
President Donald Trump has fumed to aides and others in recent days about China, blaming it for withholding information about the virus, and has discussed enacting dramatic measures that would probably lead to retaliation by Beijing, these people said.
In private, Mr Trump and aides have discussed stripping China of its "sovereign immunity", aiming to enable the US government or victims to sue China for damages.
George Sorial, who formerly served as a top executive at the Trump Organisation and is involved in a class-action lawsuit against China, told The Washington Post he and senior White House officials had discussed limiting China's sovereign immunity. Legal experts say an attempt to limit China's sovereign immunity would be extremely difficult to accomplish and may require congressional legislation.
Some administration officials have also discussed having the US cancel part of its debt obligations to China, two people with knowledge of internal conversations said.
Asked about this on Thursday, Mr Trump said "you start playing those games and that's tough". Cancelling interest payments to China could undermine the "sanctity of the dollar", he said, but added that there were other ways to levy extreme penalties on China, such as raising $US1 trillion ($1.54 trillion) by imposing tariffs on Chinese imports.
Administration officials cautioned that many of the discussions were preliminary and little formal work had begun on turning these initial ideas into reality. Other administration officials are warning Mr Trump against the push to punish China, noting it is sending supplies to help the American response.
"Now is just not the right time," one senior administration official involved in the talks said. "There will be a time to do it."
Punishing China is definitely where the President's head is at right now.
— Senior US administration adviser
But some believe the battle between the economic advisers' cautious approach to China and the national security team's push to retaliate has begun to tilt towards the national security position.
"Punishing China is definitely where the President's head is at right now," one senior adviser said.
Some political advisers have also encouraged Mr Trump to take a more forceful swing at China because they think it will help him politically.
White House officials and multiple congressional lawmakers have become increasingly fixated on China's response to the outbreak and failure to contain it, asserting Chinese officials concealed key information and refused to co-operate with international health organisations. Chinese officials have repeatedly rejected allegations that they did not act swiftly enough to confront the virus.
A spokesman for the White House National Security Council said in an email: "We don't comment on internal deliberations."
On Monday, Mr Trump suggested at a White House news conference that the US would seek hundreds of billions of dollars in damages from China. The President also said he was considering additional measures to punish China, but did not specify what they were.
"We can do something much easier than that," Mr Trump said in response to a question about demanding financial compensation from Beijing. "We have ways of doing things a lot easier than that."
The US should know that their enemy is the virus, not China.
— Geng Shuang, spokesman for China's Foreign Ministry
Geng Shuang, a spokesman for China's Foreign Ministry, told reporters on Thursday: "The US should know that their enemy is the virus, not China ... They should focus on containment at home and international co-operation, instead of smearing China and shifting the blame onto China.
"As for punishment or accountability, as I have repeatedly stated, such rhetoric has no legal basis, and there's no international precedent ... At this time, undermining others' efforts will end up undermining oneself."
The White House discussion around retaliatory measures reflects the increasing conviction among some administration officials about China's alleged culpability in the spread of the virus, as well as political considerations. Recent polling suggests Americans' opinions of China are at a low, and presumptive Democratic presidential nominee Joe Biden has released an ad that paints Mr Trump as being weak on Beijing.
Critics say the administration's efforts to punish China amount to little more than political theatre that risks endangering the American economy and American lives, as China is likely to retaliate against measures taken by the US. The coronavirus has killed more than 60,000 Americans and cost the nation trillions of dollars in economic activity.
The chances of getting the Chinese to pay reparations is somewhere between zero and none.
— Scott Kennedy, Centre for Strategic and International Studies
"The chances of getting the Chinese to pay reparations is somewhere between zero and none," said Scott Kennedy, senior adviser at the Centre for Strategic and International Studies, a foreign policy think tank. "If your goal is to actually understand the origins and spread of the coronavirus, end this pandemic, restore economic growth, and prevent future crises, you have to get governments and different stakeholders to work together."
The potential recourse for US action has been unclear, even as congressional Republicans such as Senator Lindsey Graham of South Carolina have increasingly demanded the United States "make China pay big time" over the damage. One senior Trump adviser said the "sovereign immunity" issue has been a particular focus of the President's, as it could allow states and the federal government to sue China for damages.
Republican senators Tom Cotton and Josh Hawley are among members of Congress who have drafted legislation to strip China and other foreign governments of immunity if they took intentional acts to conceal or distort information about the coronavirus that led to damage to other countries. Mr Trump has spoken to Senator Hawley and other Republican senators about punishing China, two people with knowledge of the conversations said.
Republican senator Marsha Blackburn has also floated waiving interest payments to China for any holdings of US debt, "because they have cost our economy already $US6 trillion and we could end up being an additional $US5 trillion hit".
Bipartisan proposals have emerged in the Senate to try to move jobs from China to the United States.
