Trump Trades Trade Wars
You guys are obsessed with the trade war! These days, stocks spend their sessions ticking up and down on the whims of tariff temperament. So, do you want the good news or the bad news?
The good (and big) news is that on Friday, President Trump finally put pen to paper on the contours of a ‘phase one’ Sino-US trade deal. Two-and-a-half years in the making, this agreement could be game-changing. China will stop mishandling US (IP), stop stealing American tech, and stop manipulating its currency. In return, the US will stop hitting some 120-billion-dollars’ worth of Chinese goods with 25% tariffs (just 7.5% tariffs instead!). Now, onto the bad news!
As tensions unwind with China, President Trump is left with a hole to fill. Be it to win justice for Boeing after Brussels issued Airbus illegal subsidies, or simply to satisfy an urge for tariffs, Trump has picked a fight with the European Union! The Office of United States Trade Representatives published a list of goods including Irish and Scotch whiskeys on Friday that it plans to saddle with 100% import duties.
We’ll see where that goes. For now, it’s all about China! Expect business confidence to read stronger at its next estimation, firms to reinvest money back into themselves once again, and stocks to potentially rise on increased bottom-line profits as a result. Roses are red. Sounds too good to be true! You may be forgetting; we’re now in for ‘phase two!’