The U.S. had plans to hike duties on at least $250 billion in Chinese goods to 30% from 25% on Tuesday. Despite the partial trade deal, some banks on Sunday wrote that tariff escalation remained a serious risk.
Without a durable dispute settlement mechanism in place, another round of tariff increases cannot be ruled out, according to Morgan Stanley.
Without a durable dispute settlement mechanism in place, another round of tariff increases cannot be ruled out,"There is not yet a viable path to existing tariffs declining, and tariff escalation remains a meaningful risk," the bank said in a note. "Thus, we do not yet expect a meaningful rebound in corporate behavior that would drive global growth expectations higher.". As part of phase one, China will purchase between $40 billion and $50 billion in U.S.
"And as long as such punitive tariffs remain, we would describe US-China economic relations as bad, not good."
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