U.S.-China trade dispute likely to dash chance of near-term resolution, uncertainty to further sap global business confidence: S&P Global Ratings

According to S&P Global Ratings, the latest retaliations in the U.S.-China trade dispute seem to dash any chance of a near-term resolution. A report published today, titled "Global Trade At A Crossroads: Prospects For U.S.-China Deal Fade," says the uncertainty will further sap global business and investor confidence.

On August 23, 2019, the Office of the U.S. Trade Representative announced an additional tariff of 5 percent on all the approximately US$550 billion worth of goods imported annually from China. This U.S. action responds to China's recent plan to impose additional tariffs of 5-10 percent on approximately US$75 billion worth of 5,078 goods imported from U.S.

Furthermore, China announced it is reinstating the 25 percent and 5 percent tariffs on automobiles and parts imported from the U.S. effective December 15, 2019.

In S&P Global Ratings' view, these recent events have shaken investor confidence further, and incrementally worsened the global business and economic outlook. These latest developments also raise the risk that the trade dispute could spill over into the services arena. In services, the U.S. enjoys a trade surplus with China.