Analysis: Trump's threat to "dramatically increase" tariffs on China is just a bargaining chip, and another "trade agreement" is expected to be reached soon.

On October 12, The Kobeissi Letter released the latest market analysis stating, "The news regarding China's export control of rare earths was actually issued around 8:30 AM Eastern Time on October 9, which was 26 hours before Trump posted. In other words, this was originally a 'non-news event' — until Trump commented on it more than a day later. Last night, China issued a statement clarifying its 'export control' policy on rare earths. The statement indicated that the new control measures are not a comprehensive export ban, and applications that 'meet the requirements' will still be approved. During last Friday's market fall, our view was that Trump's threat to 'significantly increase' tariffs on China was merely a bargaining chip. Following China's clarification, we believe the likelihood of Trump actually implementing a 'significant increase' in tariffs on China is extremely low. Currently, it seems that the largest crypto assets liquidation in history, along with the S&P 500's market capitalization evaporating by $2.5 trillion, all stemmed from a huge misunderstanding. We expect another 'trade agreement' to be coming soon.