Skip to Content
US Videos

Why the Market is Skeptical of the China Trade Truce

Lack of agreement on details, new negotiator’s hard line, and other complicated issues have made investors wary.

Stephen Ellis: The market has been, rightly, I think, skeptical around the Trump and the U.S.-China trade truce agreement announced over the weekend. We think the market is skeptical for three major reasons. 

First, if you look at the readouts from the China and the U.S. delegations, there's not necessarily a lot of agreement between the two. For example, the U.S. called for China to push for a large increase in agricultural product purchases immediately whereas the China release says nothing about that. Similarly, the China release says that the U.S. will respect China's One China policy whereas the U.S. release didn't say anything about that. So net-net, it creates a lot of confusion about what is needed for this type of agreement to be successful. 

To view this article, become a Morningstar Basic member.

Register for Free