Unresolvable US-China trade war
By Baiye 04-12-2019
Patrick Armstrong, CIO of Plurimi Investment Managers said on Tuesday that in the long term, the Sino-U.S. trade war is “unresolvable”.
Markets have experienced volatility on the back of news relating to the U.S. and China’s “phase one” deal since President Donald Trump announced it was being negotiated in October. The U.S. president added fresh uncertainty to proceedings on Tuesday when he told reporters in London it might be better to wait until after the United States’ 2020 election to strike a deal with Beijing.
Despite months of anticipation from markets, however, Armstrong speculated the preliminary deal would be a “sell the news type event” with little economic impact.“I think any trade deal we get between the U.S. and China is going to be very shallow,” he explained. “It’s not the all-encompassing deal we were hoping for. I think what Trump did yesterday is a real warning”.
Analysts have been weighing in on the potential economic impact of the U.S. and China’s “phase one” deal being signed for months. Many have speculated that while markets may respond positively to the prospect of a deal, its effect on the wider economy is likely to be limited.
Last week, Keyu Jin, associate professor of economics at London School of Economics, described the phase one agreement as a “face deal”，Meanwhile, Yale University professor and former Morgan Stanley Asia Chairman Stephen Roach said that the deal was “pretty hollow” but “politically expedient, especially for the U.S. president.”Others have shared Armstrong’s pessimism on the longer-term outlook for the trade war.