The direct impact of the Trump administration’s 25% tariff on Chinese goods will actually be somewhat limited, but the risk of subsequent tit-for-tat retaliation on both sides is no small matter, according to analysts at Nomura.
Key Quotes
“The next key date is 30 June, when the US is scheduled to release a series of investment restrictions and export controls for related “Chinese persons and entities”. China’s economy has already been clouded by a sharp slowdown in fixed asset investment growth due to the government’s deleveraging drive, a problematic property sector, a mounting debt burden and rising credit defaults. The rising risk of a disruptive trade conflict makes a bad situation tentatively worse. With this potential double whammy, we believe Beijing will very likely introduce further easing measures in the months ahead.”
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