China’s trading partners wary of Phase One deal - SCMP

Finbarr Bermingham, writing for the South China Morning Post, has published an article that sats hat China’s trading partners are wary of a phase-one trade war deal, while analysts puzzle over US$200 billion import figure. 

Key notes

• Giant increase in China’s imports from the US would come at the expense of other trading partners, which are concerned at the prospect of phase one trade deal.
• Analysts say US$200 billion purchase agreement is mathematically possible, but wonder about long-term impact on trade and supply chain.

Lead paragraphs

Economists continue to puzzle over the details of the US-China phase one deal announced last Friday, particularly Washington’s demand that Beijing imports an extra US$200 billion of American goods and services over two years.

The deal would effectively double China’s imports from the United States, which were around US$188 billion in 2017, the last year before tariffs decimated shipments, according to a fact-sheet released by the Office of the United States Trade Representative (USTR).

FX implications

Markets are on standby for such ramifications, but for now, the euphoria keeps US stocks elevated. The FX space, however, is on a razor's edge with respect to a number of pessimistic probabilities.