US and China trade conflict to be a prolonged one – Nordea Markets

A swift settlement between the US and China is not on the cards, according to Tuuli Koivu, Research Analyst at Nordea Markets.

Key Quotes

“Even if Trump and Xi strike a deal at the G20 summit, it will likely be a superficial agreement with little content. In that case, the US would probably postpone announcing new tariffs on the rest of Chinese imports. But the existing tariffs will not likely be removed until China takes meaningful steps to open up. Further escalation in 2019 cannot be ruled out given Trump’s unpredictable negotiation tactics.”

“One of the reasons to expect more tensions between the US and China is that Trump has his voters’ support for his strict China policy. In addition, a growing share of US companies is also ready to push China harder.”