Tuuli Koivu, analyst at Nordea Markets, suggest that although the main emphasis of the US-China agreement is on increasing quickly exports from the US to China, and thus probably serves more Trump’s personal purposes than the US future economic development, the deal is not totally empty on the structural questions. 

Key Quotes

“There seems to be some progress especially on forced technological transfers. The promises on the intellectual property rights and opening up the financial sector seems to be more or less repeating China’s earlier commitments and as always, the implementation will be followed very carefully. Regarding the follow-up process, the US was able to push China to establish a bilateral body in order to resolve the disputes.”

“But of course most of the challenges will remain in place as the phase one deal falls short of removing most of the structural problems between the countries. China will keep developing further its economic model where the state (and the Communist party) plays a key role.”

This path will certainly create increasing challenges between China and the Western counterparts, not just the US and we expect that there will be a continuous flow of measures hindering further cooperation especially from the US side. For example, the role of Huawei and 5G was not part of the Phase one deal.”

“However, the year 2020 is about the US presidential elections and the as Trump has also noticed one should not expect results from the Phase two negotiations prior to the US elections. Given that Trump can declare a victory after the Phase one deal, he does not want to rock the boat before November.”


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD loses 1.1800 amid escalaing US-Sino tensions

EUR/USD dips sub-18 after the US reported an increase of 1.763 million jobs in July, better than estimated but pointing to a deceleration. Escalating Sino-American tensions are boosting the dollar and fiscal talks are eyed. 


GBP/USD resumes decline, weighed by UK concerns, US-China conflict

GBP/USD trades at fresh weekly lows below 1.3050 as the dollar got a sudden boost from mounting tensions between the world's two largest economies. UK Chancellor Rishi Sunak said the furlough scheme that is underpinning the economy cannot last forever.


XAU/USD drops $50 from record highs to the $2020 area

Gold prices are falling sharply on Friday, trading below $2040/oz at the moment. Earlier on Friday, the yellow metal reached at $2075, a new record high.

Gold News

Bitcoin may extend the recovery once Gold resumes the rally

Gold retreated from the recent highs, but the sentiments are still bullish. Cryptocurrencies resumed the upside, some altcoins are demonstrating strong gains. ETH/BTC stopped the downside correction and settled at $0.03300.

Read more

WTI drops 1% to $41.50 ahead of US NFP, rigs data

WTI (futures on Nymex) is on a steady decline so far this Friday, undermined by reduced demand for higher-yielding assets amid the renewed US-China tensions induced risk-aversion.

Oil News