Suspension of US-China Trade war is an allure to rapid investments in the global economy
When the US and China, the world’s largest economies pursued a trade war early 2018 experts claimed that it would slow the global economy. The Associated Press reported on July 18, 2018 that experts warned the trade war could depress spending, dwindle investments or generally slow the world economy. With the current temporary truce brokered in Argentina between China and U.S., investments are likely to increase.
During the G20 summit in Buenos Aires, the Chinese president Xi Jinping and his counterpart, president Donald Trump consented to suspend the war as China pledges a trade deal to reduce the trade deficit that fueled a bitter and unexpected war. The U.S. media outlet ABC News on Wednesday reported that President Xi’s government through the commerce ministry signaled commitment to the new trade deal after posting on its website “China will start from implementing specific issues on which consensus has been reached, and the sooner, the better.”
The Trump administration had slapped China with trade tariffs amounting to $ 200 billion on its steel, aluminum and other exports to American market on January 1. In response to the new trade tariffs, Beijing hit back with $ 60 billion new tariffs on American exports to China.
The tit-for-tat war left investors in Catch-22 situation and in all probability this must have forced some of them to suspend any prospective interest to invest. However, the 90-day reprieve on trade war signals a potential end of the trade conflict and hashing out of trade issues pitting Washington D.C. against Beijing.
Investors should now stare at a better future if the two nations walk the talk to end a war that was most likely going to depress expenditures and slow global economy. The 90-day ceasefire is also enough time for investors to make short-term investments to revamp global economy that risked a slump.
Commentary by: Obwin Owen Benjamin
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