Trump's 'small concession' doesn't mean the trade war with China is ending, experts say - EntornoInteligente
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U.S. President Donald Trump said in a Twitter post on Wednesday that he will delay increasing tariffs on $250 billion of Chinese goods from Oct. 1 to Oct. 15 as “a gesture of good will.” His announcement followed an earlier move by Beijing to exempt 16 types of American products from additional tariffs.  While such de-escalation in tensions between the two countries is welcomed, it's still difficult to see both sides reaching any “real resolution” anytime soon, said James McCormack, Fitch's global head of sovereign ratings.    President Donald Trump (L) and China's President Xi Jinping shake hands at a press conference following their meeting at the Great Hall of the People in Beijing. Artyom Ivanov | TASS | Getty Images The U.S. and China  have appeared to dial down their trade fight by announcing some concessions on tariffs — but experts warned that it's not yet time to pop the champagne.

Markets in Asia rose on U.S. President  Donald Trump 's tweet that he will delay increasing tariffs on $250 billion of Chinese goods from Oct. 1 to Oct. 15 as “a gesture of good will.” His announcement followed an earlier move by Beijing on Wednesday to exempt 16 types of American products from additional tariffs.

But, while such de-escalation in tensions between the two countries is welcomed, it's still difficult to see both sides reaching any “real resolution” anytime soon, said James McCormack, Fitch's global head of sovereign ratings.

“Things change very quickly, it's hard to know what motivation there is — to be honest — on the U.S. side. So, I wouldn't want to read too much into a small concession suggesting that we're on the road to this being resolved,” he told CNBC's “Squawk Box” on Thursday.

“I think there's a couple more chapters yet to be written in the trade war,” McCormack added.

China, too, may not necessarily be softening its stance on trade with its move to exempt some U.S. goods from additional tariffs, according to Iris Pang, greater China economist at Dutch bank ING.

She said in a Wednesday note that Beijing had, in fact, been considering such a move since May.   So, the tariff exemption was aimed more at supporting the Chinese economy, and less of “a gesture of sincerity towards the U.S.” ahead of next month's trade talks , she explained.

“There are still many uncertainties in the coming trade talks. An exemption list of just 16 items will not change China's stance. We believe that China will stand very firm in the negotiations, which will be similar to the last round of talks,” Pang said.

Unpredictable trade war From an investment standpoint, the U.S.-China trade war remained unpredictable, according to Daniel Gerard, head of investment and risk advisory for Asia Pacific at State Street Global Exchange.

That means it's still too early for investors to put more money into risk assets such as stocks, he told CNBC's “Squawk Box” on Thursday. That's especially the case as the trade war has come at a time when developments such as the Brexit crisis also added to uncertainties worldwide, he added.

The trade conflict, which started last year, has escalated multiple times this year with both sides repeatedly increasing tariffs on each other's goods. The latest tariff increases took place earlier this month before the two countries agreed to meet in October for another round of negotiations.

Still, analysts from Citi Research wrote in a note that the latest “goodwill gestures” by the U.S. and China have “induced hope for a respite in US-China tensions even as structural differences” have persisted.

LINK ORIGINAL: Cnbc

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