The “Trade Deal” is Hilarious
Category: News & PoliticsVia: krishna • 9 months ago • 64 comments
By: Joshua M. Brown
Joshua M. Brown, CEO Ritholtz Wealth management
There’s no third party enforcement or oversight of whether the two sides are meeting their obligations. Basically, it’s just political cover.
The market doesn’t care. Stocks wanted a resolution and this will do for now.
Here’s Ethan Harris and the BofA Merrill US Economics research team:
The more interesting part of the deal is China’s agreement to dramatically increase imports from the US. China is tasked with increasing agricultural, manufacturing, energy and services by more than 50% this year with another sharp increase in 2021. We remain skeptical that China can hit these targets.
The deal claims that the “purchases will be made at market prices based on commercial considerations and that market conditions…may dictate the timing of purchases.” It is hard to reconcile these very aggressive quotas with the idea of buying at market prices.
The US-China deal: A “big, beautiful monster”?
Bank of America Merrill Lynch – January 16th, 2020