The US dollar is on the road to breaking "7" and there is no turning back. Will all punitive tariffs be cancelled? !

Some time ago, when I had just finished writing about the impact of the Fed’s interest rate hike, I mentioned that the rise in U.S. stocks was just a brief recovery after the uncertainty was eliminated. Sure enough, last Friday, the day after we talked about the interest rate hike, U.S. stocks experienced an extremely exaggerated plunge across the board!

Meta fell 6.8%, Netflix fell 7.7%, Apple fell 5.57%, Tesla fell more than 8.33%, and even Amazon fell 7.56%. The three major U.S. stock indexes have successively recorded the largest single-day declines since 2020, second only to the five consecutive circuit breakers during the epidemic in 2020!

Then something good will happen to cross-border sellers. Once the U.S. stock market jumps, good things will definitely happen to the U.S. dollar. Yes, the U.S. dollar index has directly refreshed its highest level in 20 years, approaching 104, and the U.S. dollar-RMB exchange rate has once again risen to around 6.73.

It is obvious that the Fed is determined to stop loosening the monetary policy this time. There may be another 50 basis point rate hike in June. There may be more than 4 rate hikes this year, gradually raising the federal funds rate to between 2% and 3%. The entire rate hike process will last for a long time. A drastic rate hike will definitely bring the exchange rate back to the "7" era. This is undoubtedly a big bottom line for the US dollar exchange rate this year. You can rest assured to engage in cross-border transactions this year without suffering any losses in exchange rates!

There is more than one good news for cross-border trade this year. The high cross-border tariffs left by the Sino-US trade friction in 2018 will change significantly this year! The penalty period for the additional tariffs will end on July 6 and August 23 this year respectively!

Four years ago, the Trump administration launched a "301 investigation" and, in the name of antitrust and dumping, imposed punitive tariffs of varying amounts on Chinese goods and raw materials with a total value of more than 500 billion US dollars, which dealt a heavy blow to the cross-border industry and caused a sharp increase in costs for sellers in many industries.

It was such an evil punishment regulation. At that time, we all said that the United States could not do without daily necessities produced in China. As a result, the epidemic came in 2020, and the United States was forced to flood the market, causing hyperinflation. It urgently needed high-quality and low-cost Chinese daily necessities to solve the inflation problem.

The interest rate hike I mentioned in the first half is essentially also to solve the problem of inflation. Now the United States is like an ant on a hot pot, and the inflation problem is the fire that heats the pot. The trade war has been going on for now, and the United States is really the first one to be unable to bear it.