Search ForexCrunch

While global financial markets cheer upbeat developments surrounding the US-China trade deal, ING came out with a warning note considering the hidden points that may offer a tough road ahead to the US-China trade negotiators to cut the deal.

Key quotes

“Although it is positive that de-escalation is taking place, only the commitment by China to import an additional US$40bn to US$50bn of American agricultural products is a tangible result of this round of negotiations.”

“For now there is no agreement on forced technology transfers of Western companies to Chinese partners in joint ventures. Neither is there an agreement on how to stop the alleged theft of intellectual property.”

“On tariffs, the negotiation result is disappointing. All recent tariff hikes remain in place. Only the announced 5 percentage point hike on US$250bn of annual US imports from China, planned for this Tuesday, is taken out. Not even the announced 15 percentage point hike in December is rolled back.”

“For now, this mini-deal leaves a lot of uncertainy in place. So it is not likely that this takes out all the trade war uncertainty that has been plaguing business sentiment and currently depresses production and investment in manufacturing around the world.”