The US and China have a month left to sign the Phase One deal this year. This is according to the two countries’ promise to sign a partial deal before the end of the year.
Quoting BBC, the US and China have to sign the deal before December 15. If both countries failed to reach a deal by that date, they would impose another tariff and increase the existing ones.
Considering the potential tariffs, many investors and business leaders are becoming more skeptical to the possible deal. In addition, analysts and investment strategists foresee volatile markets in 2020.
Despite the urgency, latest progression does not reflect any positivism surrounding the trade war. Even worse, many analysts argue that, by considering the current state, not much will change even if Trump did not win the 2020 election.
The recent trade policies do not positively contribute to free trade. Belinda Boa, head of active investments for Asia-Pacific and chief investment officer for emerging markets at BlackRock, explained why the current policies deviate from free trade.
“Trade policy is and has been increasingly unpredictable and we’ve seen a surge in trade protectionism. This deviates from decades of globalization and of free trade. We’re moving in a very different direction,” said Boa.
Also Read: China to Sustain its State-led Economic Model
US-China Trade War Might Escalate as Trump Backs Up Hong Kong Protesters
US President Donald Trump has recently signed two bills into law to support Hong Kong protesters. Accordingly, the signing of the act does not put a smile on China’s face.
On Wednesday, Trump signed a bill that asks the State Department to annually certify that Hong Kong has the necessary autonomy to keep special US trading consideration. In particular, the bill is purposely to assist Hong Kong’s economy.
The other bill, furthermore, prohibits the sale of tear gas and rubber bullets to the Hong Kong police forces. Accordingly, this aims to cut the supply to the Hong Kong police, weakening their resistance against the protesters.
In response to the signing, China does not feel happy. In addition, the country promises to take a ‘strong countermeasures’ though it does not specify the act.
“China firmly opposes Hong Kong Act. We have made stern representations and strong protests to the US. It is a stark hegemonic practice and a severe interference in Hong Kong affairs, which are China’s internal affairs. China will take strong counter-measures,” said Geng Shuang, a spokesman for the Chinese Foreign Ministry.
Accordingly, China has accused that western countries have been secretly supporting the protesters for a significance period. The support, according to China’s officials, is aiming at weakening China’s economy and its presence in the trade war.
Also Read: Hong Kong is the Biggest Geopolitical Threat to Markets – Economist
