- Nicholas Spiro says the damage has been done: both the US and Chinese economies are slowing and the overall rift in relations will persist even if Trump backs down on tariffs
Has the sharp decline in America’s stock market – still down almost 9 per cent from its peak at the beginning of last October, despite a fierce rally since Christmas – given President Donald Trump a stronger incentive to strike a trade deal with China?
Having treated the benchmark S&P 500 index as the best measure of his administration’s performance, Trump has been rattled by the recent slump in America’s once-resilient equity market, according to White House officials, and is reportedly more willing to de-escalate the conflict.
An article in The Wall Street Journal last Thursday suggesting that Treasury Secretary Steven Mnuchin was mulling scaling back tariffs on Chinese imports, coupled with a subsequent report by Bloomberg claiming that China has proposed measures to eliminate its trade surplus with America, are fuelling optimism in markets that a trade truce is at hand.
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