As China-US tariff war heats up more and more, Morgan Stanley and JP Morgan analysts anticipate that no trade deal is likely to be finalized at G-20 summit this month in Japan. Market watchers have been expecting both Presidents Xi Jinping and Donald Trump to reach a deal at the summit. No confirmation was, however, received about whether or not Xi and Trump would be actually meeting at June-end. On Monday, Morgan Stanley and JP Morgan experts said that the situation regarding both countries has worsened to such as extent, that reaching a deal seems like an improbable option right now. James Sullivan of JP Morgan and Jonathan Garner of Morgan Stanley both agreed that US and China are not likely to finalize a trade deal, at least on a short term basis.
Trump announced last month that duties imposed on $200bn Chinese products would rise to 25% from 10%. The country is also trying to see if other $300bn Chinese goods can be burdened with tariffs. Furthermore, Huawei has been blacklisted, preventing the Chinese tech giant from doing business with US firms. China reacted by imposing its own levies and the country’s media cautioned US that Beijing could cease supply of rare earth minerals that are industrially very significant for America. Garner said that both US and China may have to tweak monetary policies in order to deal with escalating trade war. Also, further worsening scenario could affect several other nations, sending economy of the world into recession within a year.
The bank Morgan Stanley said on Sunday that results of the ongoing trade conflict are highly uncertain at the moment, but warned that moving forward with tariff rise on additional Chinese imported goods could induce a recession within 3 quarters. The bank also believes that not enough attention is being paid to impact of reduced business spending, which has the potential of driving down worldwide demand. Sullivan warned that uncertainties surrounding US-China trade war will affect global profitability and spending significantly.
David Lamy owns the Bachelor in Atmospheric Science Degree. He is associated with Industry News USA from last 2 years. With proficiency in his work, David obtained a strong position at Industry News USA and heads the Science section. “Weather forecasting” is the field of his interest. He bags total 5 years of experience in this field. Apart from his routine work, David loves to explore his cooking skills. He has participated in various cookery shows.