‘Relative calm’ in US-China trade war could help global economy in 2020, BlackRock Investment Institute says
- Trump administration may want calm ahead of US elections in 2020, according to Ben Powell of the BlackRock Investment Institute
- Ceasefire would allow China to continue internal reform, opening up
A “slight relaxation” of the trade war that has raged between the United States and China for more than a year should benefit the global economy, according to Ben Powell, the Asia-Pacific chief investment strategist at the BlackRock Investment Institute.
Powell said investors are expecting the world’s two biggest economies will reach some kind of deal, but are anticipating a “very narrow” one. He said issues between the two countries are likely to be “structural and persistent” for years, if not decades.
“It is in both China’s and the US’s self-interest to have a period of relative calm in the trade tensions over the next six to nine months,” Powell said at a media briefing on Tuesday. “That period of relative calm should feed through – even if it is just a tepid recovery in corporate confidence along with looser financial conditions and still robust demand from the consumer side – into a pickup in [capital expenditure] or manufacturing data.”
The BlackRock Investment Institute is a research division of BlackRock, the world’s biggest asset manager.
US President Donald Trump has placed tariffs on hundreds of billions of dollars of Chinese-made goods as he tries to force Beijing to alter decades of industrial and trade policy.