The two super powers have imposed tariffs on billions of dollars worth of each others goods in the last 12 months. It has hit the financial markets hard and is souring business and consumer confidence.
|Currency Pair||% Change in 1 month||Difference on £200,000|
Negotiations between Beijing and Washington have taken longer than expected and officials have made contradictory comments about progress. Earlier in the month it was stated an end to the trade war could be in sight and it could be over by the end of the March.
“I suspect there are some more bumps in the road ahead as the most difficult issues get worked out,” Lew said.
“There is no reason they shouldn’t be able to make progress so that you get something done in the window, but I don’t think it will resolve all issues for all time.”
“I think regardless of the language used to describe the agreement, there will still be core issues for the two countries to work through… The job is not to get it done once and for all, it is to keep making progress,” Lew stated.
The US negotiation team are due to travel to China on Thursday for further talks. The Chinese team will then travel to Washington in early April.
The Trump Administration have threatened to more than double the current tariffs from 10% on $200bln of Chinese goods and up it to 25%.
The danger of our two countries being on a collision course is something that both countries should try to avoid,” Lew commented.
“I think it is important at a time when we are in a late stage of recovery, with a lot of signs weakening growth globally, to eliminate uncertainty that can be addressed. So, that puts a premium on doing it sooner rather than later.”
“It is not good for markets to be so volatile, good news drives the markets up and bad news drives the markets down. More importantly, it is not good for the decisions that are made on investment and hiring if you have this huge uncertainty,“ said Lew.
The White House has made accusations against the Chinese regarding the theft of intellectual property from US companies.
The US is applying pressure on Beijing to make fundamental changes to its economic policies stating that the Chinese unfairly favour domestic companies through subsidies and other forms of support.
China of course are reluctant to make these changes. This situation is set to continue to affect the value of the greenback and until the matter is sewn up it is holding back any significant gains for USD.
US GDP is due out on Thursday and has the potential to cause volatility on the markets. There is expected to be a drop from last month’s figures of 2.6% to 2.4%. If data arrives away from expectations some may expect movement on the exchange.
Daniel Johnson is efficient, courteous & everything happens on time as directed. FCD would always be my first choice for currency purchases.
Superb service from Daniel Johnson that just gets better.
A very fast and professional service all round from contact to delivery of currencies to one’s chosen destination. Daniel Johnson is the epitome of that fine service too!