Analysis of the Impact of the China-U.S. Trade Dispute on the Manufacturing Cycle and Inflation

Macroeconomics and Market Environment

The current China-U.S. trade dispute exhibits the typical characteristics of a "chicken game", where neither side is willing to back down, leading to escalated tariffs and increasing economic losses. The positions of approximately 80 countries around the world will play a crucial role in this game, especially regarding the escalation of trade disputes and supply chain restructuring. In the future, the China-U.S. game may shift from a "chicken game" to a "hawk-dove game", and the attitudes of global economies will determine whether both sides can end the trade dispute through compromise or hardline measures. The outcome of this game will have far-reaching impacts on global economic stability and development.

The Impact of Tariffs on the Manufacturing Cycle

short-term impact ( Q2-Q32025 )

• Seizing export opportunities and inventory accumulation: China, Vietnam, and the United States experience a 20% growth in imports and exports, with industrial production on the rise.
• The shipment volume in industries such as consumer electronics, textiles and footwear, and automobiles has been revised upward, but prices have increased.
• Manufacturers stockpiling to avoid tariffs, Q3 inventory backlog risk increases.
• Market aspect: The industrial sector is rising, tech stocks are under pressure; cryptocurrency prices are volatile.

mid to long-term impact ( Q4-2026)

• Demand decline: Consumer electronics shipments remain flat, textile and footwear exports have dropped significantly, and automobile sales are declining.
• Supply chain restructuring: The Sino-U.S. supply chain is accelerating its decoupling, reshaping the global manufacturing landscape.
• Cyclical downturn: By 2026, inventory destocking pressure will peak, and the manufacturing cycle will worsen.
• Market aspect: Technology stocks fell, and cryptocurrencies fluctuated due to liquidity effects.

Key Observations

• Pay attention to changes in soft data indicators such as PMI and price expectations.
• Monitor the changes in the growth rate of hard data such as exports and industrial production.
• Pay attention to the guidance on tariff costs and demand in Q1 earnings reports from companies like Apple and Nike.
• Closely monitor the Federal Reserve's policy direction and the status of tariff exemptions.

Summary and Suggestions

A high tariff of 145% will suppress demand in the long term, accelerate supply chain decoupling, and increase manufacturing costs in the United States by 8%-15%. Inventory pressure may peak in 2026, and the manufacturing cycle faces downside risks. It is recommended to closely monitor indicators such as PMI and corporate earnings reports, to cautiously position in the manufacturing sector, and to consider stocks benefiting from the Southeast Asian supply chain.

On-chain Data Analysis

Stablecoin and ETF Fund Flows

The total supply of stablecoins reached 210.165 billion, hitting a new high since April, with an average daily issuance of 46.7 million. ETF inflows were 1.91 billion USD, which is a decrease from the previous week but still at a medium-high level. This reflects active market sentiment, but caution is needed regarding the potential volatility from rapid accumulation of funds.

Changes in Token Holding Address Distribution

The proportion of holdings in addresses with 10k-100k has slightly increased, while there has been a slight decrease in addresses with 1k-10k, and growth in addresses with 100-1k. The overall trend is the diffusion of large holding addresses towards medium and small holding addresses, which is beneficial for a more stable market structure.

Technical Analysis

BTC price is oscillating in the range of 93,000 to 95,000, and has not yet broken through the previous high of 95,700. In the short term, it may show a shift from strong to weak, and it is recommended that investors remain cautious, waiting for a breakout or breakdown of key positions before making further arrangements.