US Pres Trump: US trade deal with China has been “upset very badly” by the coronavirus

President Trump, in Reuters interview, has said that the trade deal with China has been "upset very badly" by the coronavirus and risk turns sour – US dollar spikes.

Key comments

• President Trump, in Reuters interview, says china "will do anything they can to have me lose" 2020 election.
• Says looking at different options in terms of consequences for China for its handling of coronavirus crisis.

Trade tensions are heating-up

The inevitable is underway. The trade war between the US and China has never really turned a corner. The phase 1 deal agreed verbally back in December 2019 was made on shaky foundations and the COVID-19 outbreak, a disease which Trump calls the Chinese, or the Wuhan virus, was always going to make a sick relationship between the US and China a great deal sicker.

Indeed, there appeared to be an easing of trade angst just before the coronavirus struck, however, a lot of the taxation on half a trillion dollars’ worth of goods among the two rivals remains. Neither economy is on good shape, but the fact that Beijing will unlikely be able to meet all of Trump’s trade demands means we are probably going back to the drawing board as far as a trade deal. Trump has said it – if China doesn’t meet those demands, Trump said last week, “we’ll do a termination and we’ll do what I can do better than anybody.”

COVID-19 and trade wars are not a good recipe for markets and could well be the nail in the coffin for equities and benchmarks attempting to recover from the gravitational pull of a black hole. The dollar is spiking on the news today.