Analysts at Rabobank suggest that the simmering systemic crises has gotten worse as the US President Trump spoke about upcoming US-China trade talks, stating it’s highly unlikely he will refuse to proceed with a tariff hike from 10% to 25% on the UD200bn of exports already in place, and could easily push ahead with a 10-25% tariff on the remaining USD267bn of Chinese exports too.
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“The terms of any China ‘deal’ were also made crystal clear: “The only deal would be China has to open up their country to competition from the United States. As far as other countries are concerned, that’s up to them.” The US President also ‘went there’: he specifically mentioned that a certain US electronics firm’s goods could “very easily” handle a 10% duty. (And CNH duly spiked from 6.94 to 6.95.) Whispers are that China is prepared to offer some kind of fudge over a slow-burn WTO reform as long as its core economic model of state-capitalism is left untouched, but that’s hardly going to meet the criteria we just had stated.”
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