Who is going to blink first? The US or China?

The D-day is this Sunday 15 December. Will the US go ahead with the announced tariffs on some US$156 billion of its remaining exports from China to the United States? Is the Phase 1 trade deal going ahead and signed?

Never in my lifetime have I seen politicians using trade as a political tool to exact supremacy on other countries’ leaderships. It is not military war to do that in 2019. US under Donald Trump is more keen to pull out US military personnel from conflict zones.

In this US-China trade war, individual leader’s ego, concern about how citizens view the political leadership, and which nation is more supreme, are factors that decide behaviours of leaders of US and China.

When politics and economics mix, the impact is on the economic growth of nations. Which nation is going to be poorer? The beggar thy neighbours attitude did not augur well for nations since all nations are interconnected and not isolated (or closed economy).

US and China is going head-on clashes in politics, such as the Hong Kong, the Uighurs, the South China Sea challenge. Can economic trade deal be inked in this hostile political environment?

Investments in 2019 were influenced so far by US using trade conflicts as leverage against several nations. If one were betting on what is the next move of the US administration and bet on the wrong side, one will find that the stock markets move up and down several times this year. It is probably better to stay put.

Update:
President Donald Trump and his administration indicated that they will not impose additional tariffs on China come 15 December.

Copyright © 2019, limkimtong for Living Investment

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