AWE0159 Trade War Update for Amazon Sellers Video
Channel: Steve Simonson
Date: 2019-10-17

Full Show Notes https://awesomers.com/159

On October 12th China and the USA announced a "phase one" trade deal.


Was it really a deal or was it just a cease fire? That's more of an academic question, but here are the key take aways:



1) Ratching down rhetoric is better than going farther into the abyss.

2) No formal deal has been inked, so we don't know if this will actually get over the finish line, but the USA has honored it's promise to waive or otherwise defer the additional 5% tariff that was expected to be applied as of October 15th.

3) Besides the press conferences related to the Washington DC based meetings and related press coverage we don't have alot of facts. Which leaves us to guess about what has been "agreed" to and what comes next.



And since the absence of information leaves me OPEN for speculation, here we go:



1) China got something it wanted. Waiver or delay of the 5%.

2) USA got something it wanted. A committment to buy US Agriculture products in the amount of 50 Billion dollars. (The devil, however, is in the details since we don't know over what time period that represents.)

Both the USA and CHINA could use some political wins on this trade war front and this was likely a good start for both.

The fact that the USA is bringing in billions in tariffs gives the USA some power to mitigate those industries hardest hit with retalitory tariffs. The same applies the the added tariffs for items coming into China. China has a high interest in maintaining it's manufacturing base.

Here are some things to watch for:

What happens to the next round of tariffs set to take effect on December 15th?
How will the African Swine Fever impact China's inflation and related US Ag purchases?
What impact, if any, will the Hong Kong situation have short or long term?
How will the Chinese delegation read the US Election and factor that into their results?
How will the Impeachment inquiry impact the Trump strategy on trade in China or elsewhere? (Turkey, EU, Etc..)
How will a prolonged trade way impact the global economy?
Will the Congress play politics on the Canada-Mexico-USA new agreement?
Will any tariffs get rolled back? If so when?


Stay tuned into this dynamic situation!

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