Market Relief as US-China Sign Trade Deal, but Doubts Remain

On Wednesday, the U.S. and China signed a partial trade deal giving some relief to the market. However, experts say uncertainty remains.

Gregory Gilligan said there was a great sense of welcome that the two countries signed the deal, giving some bit of relief and optimism about moving forward.

Gilligan is the chairman of the America Chamber of Commerce in China.

The U.S. and China signed the first phase of the trade deal on Wednesday at the White House. The agreement came after the two world largest economies slapped tariffs on billions of dollars’ worth of each other’s goods for the last two years.

In the deal, China agreed to buy an additional $200 billion in U.S. goods over the next two years.

According to Gilligan, even though the U.S. is still levying tariffs on $370 billion worth of China’s imports, the phase one deal will help in making of phase two deal.

AmCham China members factor in Uncertainty

AmCham China members are cautious about their 2020 investment plans. Therefore, they have factored in uncertainty.

The additional $200 billion of U.S. goods China has committed to purchase, is a difficult target to achieve. But Gilligan says it’s a good problem to have.

He says they’d rather have a hard time selling stuff than lacking an opportunity to sell.

He also added that it gives them a chance to restore trust in the relationship between the two countries.

Gilligan also thinks AmCham China will be the bridge to help its members who encounter issues by reporting them to both Chinese and U.S. governments.

But others are skeptical.

Tim Seymour says they expected some agreement, but it would still leave them with a lot of uncertainty, which he thinks they still have.

Tim Seymour is the chief investment officer at Seymour Asset Management.

According to him, despite China’s commitment to buy additional goods from the U.S., the agreement was more politically crucial for the U.S. than it was for the Chinese getting what they wanted — therefore posing a lot of Uncertainty.