Market analysts from UBS Global Wealth Management and BNY Mellon have voiced their concerns that the trade war might not be over as quickly as President Trump wants people to think, and that there may still be an extended downside for stocks as the conflict between the United States and China drags on.
Last week U.S. President Trump said that a deal could be reached “fast”, even after Beijing announced that talks won’t proceed unless Washington corrects its “wrong actions.” Following these conflicting claims, Tan Min Lan, Asia Pacific head of chief investment office at UBS Global Wealth Management, voiced her opinion that a trade deal will come “just before 2020.” Tan based her assumptions on the fact that at the moment, there isn’t enough pain in the market to prompt a quick deal from either side.
Her sentiment is shared by BNY Mellon chief strategist Alicia Levine, who believes that the recent escalation of the trade war into a technology and security war could extend the conflict and send markets lower for a longer period than original anticipated. She noted that Trump’s continued threats for additional tariffs have done nothing to quell fears or signal an end to the trade war.
Over the weekend, Chinese state news agency Xinhua published a piece that hinted that China and the U.S. are quite far from reaching a deal due to the fact that Beijing sees Washington’s requests as a threat to its “core interests.” Simply put, the article implied that certain matters, such as China’s treatment of foreign countries and management of its economy, are not up for negotiation, no matter how hard Washington pushes. According to CNBC which published excerpts of the translated article, Chinese officials believe that Washington’s demands spread far beyond the original trade dispute and that the U.S. is attempting to corrode China’s economic sovereignty.
Though Asian markets were mostly higher on Tuesday afternoon in Asia, the movements may be a small ray of light in a situation that market analysts and political pundits believe remains shadowed in darkness.