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Illustration: Sarah Grillo/Axios

Chinese stocks were crushed last year after the Trump administration announced it would begin putting tariffs on essentially all Chinese imports to the U.S.

The backdrop: History looked poised to repeat itself on Monday, after Trump called off the ceasefire, threatening to raise tariffs on Chinese goods to 25%. China's onshore stock exchange sank 7.4%, the biggest fall since January 2016 (the 4th largest decline this decade, 10th largest this century and 23rd largest in the history of the exchange, according to FactSet).

Between the lines: Chinese shares were little changed Tuesday. It shows that perhaps investors aren't quite ready to declare China's economy DOA after news Monday night that tariffs would go into effect "the first minute of Friday."

Why it matters: China is now more important to the health of the global economy than the U.S. It's the top trading partner to more countries and with emerging markets driving 60% of global GDP expansion is the engine powering the world's growth.

Catch-up quick: The trade war hit China at a moment of weakness in 2018. The country was attempting to unwind some of its problematic debt and lean into the reorientation of its economy from a goods producing third-world warehouse to a self-sufficient, service industry scion leading in next-generation AI and 5G technology.

  • The combination of the trade war, the debt pullback and the shift of resources all weighed on China's growth, spurring the government to take action and re-introduce economic stimulus in late 2018.
  • The measures look to have worked as China's manufacturing and GDP readings have rebounded.

The bottom line: China may now be stronger, but the rest of the world is weaker.

  • The eurozone looks to be recovering but is still projecting just 1.1% growth this year. Italy just came out of recession, Sweden and Germany narrowly avoided one in 2018, and Britain is a hard Brexit away from a possible economic catastrophe.
  • South America's largest economies — Brazil, Colombia and Mexico in North America — have seen some improvement in manufacturing data but are treading water, with Argentina lurching toward another economic crisis.
  • Africa's 2 largest economies, South Africa and Nigeria, are sputtering and Australia is fighting to avoid its first recession in almost 30 years.

What they're saying: James Barrineau, head of emerging markets debt at Schroders, told me last year as the trade war heated up, "If the market were to conclude that trade wars were causing significant stress in an economy of [China's] size I think risk appetite globally would dry up pretty quickly."

Go deeper: The trade war isn't breaking China's economy

Go deeper

1 hour ago - Health

Florida records most new daily COVID cases in state since pandemic began

Nurses bring a portable x-ray machine to a treatment tent outside the emergency department at Holmes Regional Medical Center in Melbourne, Florida, set up to serve as an overflow area as the number of COVID-19 infections surges throughout Brevard County. Photo: Paul Hennessy/SOPA Images/LightRocket via Getty Images

Florida reported 21,683 new COVID-19 cases — the most in the state in a single day since the pandemic began, per data released by the Centers for Disease Control and Prevention on Saturday.

The big picture: Florida is now the U.S. coronavirus epicenter, with the Delta variant driving a surge, Axios Tampa Bay's Ben Montgomery notes.

Updated 4 hours ago - Health

Chart: Less than 0.1% of vaccinated Americans tested positive for COVID-19

Expand chart
Data: CDC and state Covid dashboards. Dani Alberti/Axios

Of the 164 million vaccinated Americans, around 125,000 people have tested positive for breakthrough infections and 0.001% have died, according to state data compiled from state dashboards by NBC and data from the Centers for Disease Control and Prevention.

Why it matters: While "breakthrough cases" have been getting media attention, the low numbers show that the pandemic is mostly a threat for the unvaccinated population.

Biden officials celebrate infrastructure deal in fuel-cell big rig

White House national climate adviser Gina McCarthy and Energy Secretary Jennifer Granholm celebrated progress on President Biden's infrastructure package by taking a spin in a Kenworth fuel-cell, zero-emissions Class A truck.

What they're saying: "We have a deal, a Bipartisan Infrastructure Framework deal," Granholm said. McCarthy responded: "it's big and it's beautiful."