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

BlockBeats News, October 12th, The Kobeissi Letter released its latest market analysis stating, "Regarding the news of China's rare earth export control, it was actually released around 8:30 am Eastern Time on October 9th, 26 hours before BitTrump's post. In other words, this was originally a 'non-news event'—until Trump posted his comments more than a day later."

Last night, China issued a statement clarifying its "export control" policy on rare earths. In this statement, it was mentioned that the new control measures are not a comprehensive export ban, and applications that "comply with regulations" will still be approved. During last Friday's market downturn, our view was that Trump's threat to "substantially increase" tariffs on China was just a negotiating tactic.

After China's clarification, we believe that the likelihood of Trump actually implementing a "substantial increase" in tariffs on China is extremely low. It now appears that the largest cryptocurrency liquidation in history and the $2.5 trillion market cap evaporation of the S&P 500 both seem to have stemmed from a massive misunderstanding. We expect to soon see another "trade agreement."