Chinese meme stocks like ‘Trump Wins Big,’ ‘Cutting Ears’ soar as US shooting sours mood

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Investors worry about universal tariffs, while meme stocks have their day after assassination attempt on US Presidential candidate Donald Trump

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From left, China’s President Xi Jinping and then-US President Donald Trump shake hands on November 9, 2017, during a meeting outside the Great Hall of the People in Beijing. Photo: TNS

Zhang Shidongin Shanghai

Published: 4:00pm, 15 Jul 2024Updated: 5:42pm, 15 Jul 2024

The attempted assassination of US presidential candidate Donald Trump has raised bets that the former president could return to the White House after the November elections, and impose trade policies that could be unfavourable towards China.

The shooting, which pierced Trump’s right ear and left one spectator dead in a campaign event in Pennsylvania over the weekend, has boosted the odds of his second presidency to 70 per cent from 60 per cent, according to a public poll. Trump said earlier that he would impose tariffs on all Chinese imports at 60 per cent if elected, and analysts said his policies favouring a stronger US dollar and trade protectionism would trigger outflows from Asian markets.

The Hang Seng Index dropped 1.5 per cent for the biggest loss in a week on Monday, and the technology-heavy Shenzhen Composite Index slid 0.8 per cent, while benchmarks in Taiwan and Thailand also headed south. The onshore yuan weakened 0.2 per cent against the US dollar to 7.2607 per dollar.

“If the assassination attempt improves Donald Trump’s electoral prospects as dramatically as pundits seem to be suggesting, markets may be underpricing the consequences of universal tariffs and a potential curtailing of Fed independence,” said Benjamin Picton, a strategist at Rabobank.

Republican presidential candidate and former US President Donald Trump gestures with a bloodied face after he was shot in the right ear during a campaign rally at the Butler Farm Show in Butler, Pennsylvania, on July 13, 2024. Photo: Reuters

The shooting incident came just before China’s Communist Party kicked off its third plenary session for its decision-making Central Committee on Monday. Investors are keeping a close watch on the four-day conclave for clues as to how Party boss Xi Jinping will tackle the economic headwinds triggered by the downturn in the property market and fiscal stresses facing China’s local governments.