Economist Daniel Lacalle rejects fears of a stock market 'apocalypse' and warns of the risk of EU alignment with China

Economist Daniel Lacalle spoke exclusively with Mario Noya, the editor-in-chief of VOZ, to analyze the current state of the markets following the U.S.-China trade war. Lacalle firmly rejected the notion of a looming stock market "apocalypse" but cautioned that the tariff policies introduced by Donald Trump to address the U.S. trade imbalance could push the European Union closer to China.

Objective, to prevent "China from destroying the monetary, financial and political system from within"

The economist emphasized that Trump is not seeking to battle the entire world to impose a new economic order, but rather aims to correct the current situation in which the U.S. has been significantly disadvantaged. He noted that, since Biden's tenure in the White House, foreign products have been entering the U.S. market with minimal cost, while other countries have implemented both tariff and non-tariff measures that harm U.S. producers.

For Lacalle, however, the primary goal behind the U.S. president's strategy is to get "China to stop using the huge export revenues it receives to destroy from within the Western world's monetary, financial and political system."

The U.S. is not "the only one in the neighborhood with open doors and windows"

The trade war initiated by Trump, according to Lacalle, will enable the U.S. to begin negotiations with the affected countries to restore balance, ensuring that the U.S. is no longer "the only one in the neighborhood with open doors and windows." Lacalle highlighted that U.S. products not only face border levies, but also policies that benefit products from these countries -such as tax breaks- over North American ones.

However, the situation created by Trump carries several risks, the economist warns. The first is that the "EU will embrace China" to form a united front against Trump. Additionally, there is a possibility that other countries will use the figure of the U.S. president to further bolster protectionist measures against the U.S.