Trade war: doubts persist despite latest round of good will

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Fears remain among analysts and asset managers that trade war tensions will worsen and hurt global growth, despite the latest softening in the dispute. Morningstar analyst Dave Meats argues the US posturing on trade has hurt global economic growth and raises the potential for a global wave of protectionism. Ron Temple, head of US equity for Lazard Asset Management, also fears the investing community is underestimating “the severity and the duration” of the trade war, which he predicts could extend beyond the Trump administration. Temple says the trade war has evolved to the point where China is now considered – on both sides of US politics – as a security threat. “I think it’s evolved from an economic dispute around trade deficits, intellectual property, market access, industrial policy, which you can negotiate, to increasingly be viewed in Washington DC on a bipartisan basis as a national security issue,” Temple said in a recent interview with Morningstar. “And put simply, I think, in the US people used to think of China as an economic competitor, but increasingly people are thinking of it as a national security adversary. “I tend to think of ebbs and flows with a structurally more negative trajectory for this relationship. And I think it will last well beyond Trump administration.” Markets rose overnight following China’s announcement that it will exempt several US products from tariffs. This coincided with the Trump administration’s decision to delay tariffs as a goodwill gesture to mark the 70th anniversary of the […]

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