- Global stocks are getting hammered as markets reassess the risk outlook in US-China trade negotiations.
- Citi has highlighted four key dates and events to watch over the next three months as negotiations play out.
US stocks got belted overnight, as positive sentiment on US-China trade turned to doubt.
Many analysts are unconvinced a trade deal is imminent, with lingering fears adding to concerns about a slowdown in global growth.
Citi’s global economics team is in the sceptical camp, arguing that even if a deal can be reached it “would only be one piece of the US administration’s strategy vis-à-vis China”.
In other words, the two countries are still a long way from aligning their broader strategic objectives.
For example, issues around intellectual property theft remain unresolved, and Citi thinks “additional trade and investment restrictions are likely” from the US.
However, a preliminary deal on trade would help reduce the “aggressiveness” of those measures.
Following the postponement of tariff hikes, March 1 now looms as the key date for an escalation if an agreement can’t be reached.
And the outlook for how trade negotiations will play out before then is still very uncertain.
In view of that, Citi highlighted four key dates and events to watch over the coming weeks as negotiations play out:
We’ve summarised the most important ones here:
1. December 18-22: Chinese President Xi Jinping’s speech at the 40th anniversary of China’s economic reforms.
2. Due by December 19: The US commerce department’s decision on what industries will be included as “emerging technologies“, which could be subject to further export controls.
3. Due by February 7: Report on the investigation into whether China intervened in US midterm elections in November, which could come with possible sanctions.
4. Until February 20: Findings from the US treasury department’s CFIUS pilot program, increasing oversight of foreign investment in “critical technology” companies.
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