Efter den ventede fase 1-aftale mellem USA og Kina er der ikke udsigt til flere sænkninger af tarifferne i handelskonflikten – inden valget i november 2020. Det vil være for risikabelt for præsident Trump.
We are looking very much forward to the signing of the US-China phase 1 trade deal although the signing in itself is not a huge market mover. The signing ceremony is scheduled to take place in the White House at 17:30 CET. The 86-page agreement will also be released today. The US and China have said that now the phase 1 trade deal has been finalised, they will get started with phase 2.
We think those negotiations are going to be more complicated and think there is a 50% chance of a permanent deal ahead of the US presidential election. The good news is that we have gone from a period with trade war escalation to now de-escalation and we do not think US President Trump dares to U-turn again, as the trade war was hurting the US economy, in particular the – to him – very important manufacturing sector, hence damaging his re-election chances.
Some scepticism around the US-China phase one deal crept into the markets following a period with very strong performance of equities and other risk assets. The small set-back was fuelled by a Bloomberg report that Trump would not reduce tariffs on China further on this side of the election in November. Some commentators also expressed scepticism that China would be able to buy the large amount of goods they are committing to in the phase-one deal. As we’ve said before, while the trade war has peaked we should still expect a bumpy road but overall we expect the talks to move a bit to the background for now.
