As President Trump departs for Vietnam on Monday for his second summit with North Korean leader Kim Jong Un, back home markets are rejoicing, with the S&P futures finally back over 2800 following the president's decision to postpone the March 1 tariff deadline - which would have seen tariffs on some $200 billion in Chinese goods to rise by 150%. I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues.
While the market has clearly communicated its view - namely, that postponing the deadline confirms the pervasive optimism that a deal will be reached when Trump and Xi meet next month - a roundup of analyst comments published by Bloomberg showed that the consensus has decidedly shifted toward expecting an amicable resolution to the US-China trade war, though some reservations about its long-term efficacy remain.
Several analysts said they expect the US's tariffs on China to be completely unwound.
Hua Changchun, Guotai Junan Securities Co. The two nations will likely reach a deal on all aspects in late March and the tariffs will not rise from the current levels, but that doesn't mean the conflict between them will be over.
The extension of the tariff deadline shows that both sides have a strong will to reach an agreement.
Now the question is whether the focus moves from tariffs to technology where China looks more vulnerable.
In summary, analysts expect that Trump will prevail over the China hawks in his administration and strike a deal, regardless of whether Beijing commitments to "Structural reforms", like scaling back China 2025, reducing IP theft/forced transfers, and agreeing on necessary enforcement mechanisms.
https://www.zerohedge.com/news/2019-02-25/analysts-react-china-tariff-deadline-delay-deal-will-likely-be-reached
While the market has clearly communicated its view - namely, that postponing the deadline confirms the pervasive optimism that a deal will be reached when Trump and Xi meet next month - a roundup of analyst comments published by Bloomberg showed that the consensus has decidedly shifted toward expecting an amicable resolution to the US-China trade war, though some reservations about its long-term efficacy remain.
Several analysts said they expect the US's tariffs on China to be completely unwound.
Hua Changchun, Guotai Junan Securities Co. The two nations will likely reach a deal on all aspects in late March and the tariffs will not rise from the current levels, but that doesn't mean the conflict between them will be over.
The extension of the tariff deadline shows that both sides have a strong will to reach an agreement.
Now the question is whether the focus moves from tariffs to technology where China looks more vulnerable.
In summary, analysts expect that Trump will prevail over the China hawks in his administration and strike a deal, regardless of whether Beijing commitments to "Structural reforms", like scaling back China 2025, reducing IP theft/forced transfers, and agreeing on necessary enforcement mechanisms.
https://www.zerohedge.com/news/2019-02-25/analysts-react-china-tariff-deadline-delay-deal-will-likely-be-reached
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