A Vanishing Window for Negotiations

Tariff threats have escalated and shocked markets once again. The initial response from PBOC has been stabilizing, but further currency weakness should be expected as China has few symmetric policy tools to offset the impact of tariffs. As a result, Beijing may turn to asymmetric retaliation against US firms and interests. Any remaining expectations of a more comprehensive bilateral trade agreement should now be substantially downgraded.

Posted August 6, 2019
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