This past week has some a fair amount of market volatility as the potential for a large-scale trade war heats up. The Trump Administration this week announced tariffs on up to $60 billion in Chinese goods, a move that was not unexpected at this point. The order could, however, be just the first of several actions to come from Washington as it looks to erode what it sees as significant advantages to China and elsewhere. The tariff announcement comes just weeks after tariffs on steel and aluminum were announced.
China did not sit idly by, however, and on Friday announced some tariffs of its own. The Ministry of Commerce announced on its website that it could target 128 U.S. products in retaliation. Some of the potential tariff targets include wine, dried fruit, nuts and ethanol products. Such products could potentially see a 15% duty, while other products such as pork and recycled aluminum could potentially see a 25% duty.
U.S. agricultural products, however, could be the largest target for retaliation from Beijing, with soybeans potentially being the main target.
Beijing has warned that differences must be resolved in order to preserve a strong bilateral relationship.
The possible effects of a larger trade war are hard to gauge, but prices on many consumer goods could potentially rise as material costs go up. Whether or not such a rise would put a significant dent into consumer demand remains to be seen.
This issue is being taken very seriously by investors, however, and risk aversion is on the rise. The Dow Jones Industrial Average saw a decline yesterday of over 700 points as fears of a global trade war fueled significant selling. For stock investors, yesterday’s plunge could potentially be just the first wave of selling. Any additional sell-offs of that magnitude could potentially be indicative of a market reversal, and the bears may come out in droves at the first sign of blood.
Global market dynamics are changing, and could continue to evolve rapidly. That is exactly why now may be the ideal time to consider allocations in alternative asset classes that can potentially outperform during a trade war, while also providing added portfolio diversification.
Gold is seeing heavy buying interest on Friday as the threat of a global trade war accelerates, and Friday’s gains could be just the tip of the iceberg. This key asset class could stand to climb substantially from current levels, as it is often viewed as a safe haven for investors. If you do not already have gold within your portfolio, now is the time to consider a significant allocation.
Adding physical gold to your portfolio has never been easier. Speak with an Advantage Gold account executive today about the potential benefits of gold ownership and how this asset may potentially assist in the preservation of your wealth during a trade war or stock market collapse. Advantage Gold account executives are here to answer any questions you may have, and can even show you how to incorporate this key asset class using your IRA account.
Don’t wait for a global trade war to wipe out billions in stock market value before taking action. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, agriculture, gold, stock market decline, trade war, trump administration