Trade truce for Now

Diana Choyleva was had wrote few days back Trade truce in G-20 which I wrote in an article few days back http://worldoutofwhack.com/2018/11/29/g-20-is-there-a-temporary-truce-on-hand/

Now that we know that she has pulse of this matter she writes
As we expected, Xi and Trump called a truce after their productive dinner at G20
This is far from a breakthrough, but markets are likely to take the news well
The US will hold off on raising tariffs on Jan 1st, but will raise them to 25% if a deal isn’t reached in the next 90 days
Beijing’s statement fails to mention the deadline and strikes a more general tone
As we argued, China will ramp up its purchases of US goods
But for Washington, forced technology transfer, intellectual property rights and non-tariff barriers are key
We expect China to cede ground on the above, but its high-tech leadership ambitions are non-negotiable
The trade war is likely to morph into a tech war in 2019
For now, investors’ reluctance to see this as a fundamental shift in US-China relations should ensure at least a lukewarm welcome to the news

Danielled Lecalle  writes

The “agreement” between Trump and XiJinping is nothing more than a diplomatic ceasefire. China is unlikely to improve transparency and intellectual property protection and the US trade deficit has widened since January.”

My two cents

This is nothing more than kicking the can down the road and the statement by China and US post G-20 meeting does not even match is content…¬† but Hey who cares?. China has already cut down the margin for trading stocks, starting next week and Global fund managers like Pavlov dog will be raring to cover some lost alpha before the year comes to an end.¬†

Enjoy till it last