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To be perfectly honest, the political saber-rattling these days has gotten a bit old.
It seems every day we're hearing news of another country threatening the United States with sanctions, tariffs, or just vague retaliation for comments from the White House.
And in response, the Twitter audience receives constant entertainment in the form of retaliatory rejoinders from our commander in chief.
But despite the relationship drama between the world's most powerful nations, it's still important to know what's going on.
If only to be properly prepared.
That's why the escalating threats between the United States and China are now more important than ever.
After multiple tariff threats from the United States, China indicated it would place American oil exports on its list for probable levees – a move that follows a White House threat to include all approximately $500 billion worth of Chinese exports on the U.S. penalty list.
Now, when it comes to oil, China is one of the United States' biggest customers.
It imported $3.2 billion worth of oil last year. As of April 2018, Chinese imports of U.S. oil products have soared a staggering 1,994% since 2016.
This indicated China would continue to be one of the biggest importers of American crude.
But a lot can happen in three months.
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With U.S. production increasing year after year, exporting to other countries is becoming much more important to the "energy balance," something I've been discussing for years in Oil & Energy Investor.
Threats of tariffs on these products could heavily change the oil price environment and the "energy balance."
As worrying as these tensions seem, though, analysts say that the United States is coming out ahead in the game, as far as stocks are concerned…
The S&P is up 6.1% this year so far. Meanwhile, China's Shanghai Composite Index has crashed nearly 13%.
You'd think this would put us ahead in the ongoing trade war.
But if you thought that the conflict between these two economic powerhouses stopped at tariff jabs, you'd be mistaken.
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About the Author
Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.
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