What would happen if China and the United States really decouple? From global finance to cryptocurrency markets Just now, Weituo @ thecryptoskanda raised an interesting point: Is it possible that @ realDonaldTrump did not intend to reach an agreement with China from the beginning, but instead wanted a complete decoupling between China and the United States? Although I disagree, I cannot rule out the possibility, but if this really happens, how far-reaching would the impact be if China and the United States completely cut off trade, technology, and financial exchanges? Today, let's imagine the chain reaction of major markets in this "black swan" scenario. 🌏 Global Economy: Supply Chain Breaks+Stagflation Expectations Outbreak China is the core of the manufacturing industry, and the United States is the world's largest consumer market. Once decoupled, the global supply chain will be torn apart and restructured. The Chinese industrial chain will be severely impacted (especially export-oriented manufacturing), with commodity prices rising, industrial products rising, and consumer goods rising, driving global inflation to rebound. The prices of consumer goods in the United States have skyrocketed, especially electronics, clothing, machinery, toys, etc. The Federal Reserve may be forced to raise interest rates again, causing the economy to fall into stagflation and global funds to tighten, leading to a stagflation crisis. US stock market: revaluation of technology and consumer giants Companies such as Apple, Tesla, and NVIDIA that rely on the Chinese industrial chain will be under pressure and their valuation models will need to be recalculated. Consumer goods prices are soaring, people's living costs are soaring, and the retail sector is under great pressure. Risk assets are being sold off, and risk aversion dominates the flow of funds. 🇭🇰 Hong Kong Stock Market: Connection Function Failed, De Sinochem Pricing Logic Launched The role of Hong Kong stocks as a "financial springboard" between China and the United States has failed, and there will be a "second round of valuation killing" for technology stocks and Chinese concept stocks. The withdrawal of foreign investment and the drying up of liquidity have raised doubts about the Hong Kong dollar linked exchange rate system. The downward trend of the Hang Seng Index may trigger a historical level adjustment. 🪙 Cryptocurrency Market: A New Stage for Risk Avoidance of Falling First and then Rising? Short term: Risk aversion sentiment is high, BTC/ETH and other assets linked to the US stock market are experiencing a pullback Mid term: Weaponization of US dollar finance drives' de dollarization 'narrative Long term: BTC's "digital gold" attribute is expected to strengthen, Web3 becomes a "neutral asset" channel, DeFi and stablecoins rise in status, and China does not rule out developing its own stablecoin. Summary: It can be seen that the impact of a simple decoupling is extremely frightening and will seriously affect the interests of the current powerful class in the United States. Last time I said there might be a few more bullets flying, I'm not joking. In addition, the skyrocketing prices and increasingly difficult living conditions make it a question mark how long Trump's basic plan - the red necks - can persist. Finally, Trump wants to cut interest rates and release water, so he has repeatedly pressured the Federal Reserve. If decoupling really occurs, the result is more likely to lead to interest rate hikes, going in the opposite direction. So my personal inclination is that Trump is still playing "Bluff" and using extreme pressure to force China to surrender, which is more in line with his nature as a businessman. This wave is most likely a joke. His cabinet can bring reporters into the combat meeting. How clever can you expect them to be? Two arrogant and coquettish elementary school class bullies are getting into a fight, but they will eventually reach an agreement. Let's endure