Reportedly, Goldman Sachs no more believes the two largest economies globally would be able to solve their long-running trade spat before the U.S. presidential election 2020. It came shortly following the U.S. officially labeled China as a “currency manipulator,” in the middle of rapidly intensifying tensions amid the two economic giants. In this week, the U.S. Treasury alleged Beijing of intentionally influencing the exchange rate among the U.S. dollar and the yuan to earn an “unfair competitive benefit in international trade.” The declaration followed a strong decline in the yuan compared to the dollar, with the Chinese currency infringing the 7-per-dollar stage for the first time ever since 2008. In the late last week, China assured to fight back following the U.S. President Donald Trump pledged to slap 10% levies on Chinese imports of worth $300 Billion.
In a research note published, analysts headed by Jan Hatzius—Chief Economist at Goldman Sachs—stated that they had expected this move. The note reported, “News from President Trump’s tariff statement hints that the U.S. and Chinese lawmakers are taking a tougher line, and we no longer anticipate a trade deal prior to the 2020 election.” By targeting on $300 Billion valued Chinese goods that had not previously been targeted by American tariffs, the U.S. president overruled the inflexible objections of almost his entire trade team, as reported by The Wall Street Journal, mentioning sources familiar with the matter.
On a similar note, recently, Asian markets fell on weakened expectations of the U.S.-China trade deal. Asian markets declined in early trading following President Trump poured cold water over sanguinity for a trade deal as conciliations amid the U.S. and China restarted. In a series of tweets, Trump accused China of not purchasing more American agricultural commodities and products and took recognition for its slowing economy.