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U.S. China Trade War Update

November 13th, 2019

 

Following the turbulence from earlier months, we had quite a few weeks of positive growth in the market. However,

much of this came from the presumption that D.C. and Beijing were approaching some sort of agreement.

Unfortunately, that is not the case. After a week of trade optimism, Trump announced that he will not roll back the

tariffs on China. And Wall Street Reacted.

“They’d like to have a rollback. I haven’t agreed to anything,” he told reporters before departing the White House on

his way to Georgia. While reporters continued to shout their questions, Trump supported his decisions with China by

mentioning the employment numbers in the last four years. He also stated that ‘China would like a deal very much,’

and that ‘They want one more than I do’. Although it is unclear who is losing more right now. Many reports are

saying that the U.S. is struggling more in the short run due to the stock market fluctuations, as well as an imbalance

in the imports and exports loss, and the deals made with Huawei and American companies. However, in the long

run, China has more to lose with 20% of all of their exports going to the United States. So we know that there will be

a deal made eventually, but how much both sides will have to suffer first is unclear. And let us not forget what they

say, it is the citizens who really pay for the tariffs.

The impact of the trade war hasn’t been seen in trade numbers however. Like mentioned before, it comes in the

market, with business confidence and business uncertainty. This also means that businesses have less accuracy in

predicting the demand needs in the near future. Investors are started to pull their money with a very uncertain

future ahead. But does business uncertainty really indicate that bad things are ahead? No, they do not. All it tells us

is that we don’t know what is ahead. And in times like this, it is good to make sure that you are prepared for whatever

may come. Take a look at your portfolio and make sure that you Plan Smarter & Live Better.