The naivity of financial markets about U.S.- China trade negotiations

May 6th, 2019 by Hubert Fromlet, Kalmar

Only a few days ago, I read all the positive comments on the ongoing progress of trade negotiations between the U.S. and China. A trade deal any time soon was almost anticipated by financial markets.

However, new signals and threats are now coming in about the trade war between the U.S. and China which may be even escalating in the near future – developments that I have pointed at several times before in this blog (e.g. on chinaresearch.se from March 18 on the last page).

A big problem is that many analysts neither understand the psychology of the American president sufficiently since he regards China really as a major and unfair competitor nor do they understand the psychology and culture of China very well.

This means indeed poor conditions for interpreting the negotiations between the world’s two largest economies. One should be careful. Trade talks continue to be complicated.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
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