Are We Finally Close to Resolution to the Trade War?

Are We Finally Close To A Resolution to the Trade War?

                                                    Dr Shane Oliver

Dr Shane Oliver

Head of Investment Strategy and Economics and Chief Economist, AMP CapitalSydney, Australia

Investors received some good news from the recent G20 meeting in Japan after US President Trump and Chinese President Xi Jinping agreed to a truce in their trade war.

After a meeting on the sidelines of the summit, Trump agreed to resume trade talks with China and said he would not be adding further tariffs to Chinese imports.

But does this mean that the US and China are closer to finally resolving the trade war?

Triple truce

It is understandable if investors are a bit sceptical about developments in Japan because this is the third truce. China and the US agreed to a truce around May last year, then tariffs started up again.

In December last year they struck another truce at the G20 summit in Argentina, with new tariffs halted for 90 days. But talks broke down in May with Trump accusing the Chinese of backsliding on commitments. Trump ramped up US tariffs again, triggering a Chinese response.

 

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