The global trade war has negatively impacted trade volumes and appears to be a key driver of the slowdown in the global economy. How the conflict evolves and the impact of future flashpoints is likely to be critical for global growth and investment strategies over the coming years.
We believe there is a low probability that the conflict between China and the US will be resolved in 2019, with the potential for further tariffs imposed between the two countries. European autos and an uncertain passage of the USMCA are both potential flashpoints. We outline our assessment of each of the most likely scenarios.
We also highlight six potential new areas which could be drawn into the trade war, creating further disruption:
- Export restrictions
- Import restrictions
- Reserve management
- Currency devaluations
- Company boycotts
- Restrictions on the movement of people
Investment in any strategy involves a risk of loss which may partly be due to exchange rate fluctuations.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This document must not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or otherwise not permitted. This document should not be duplicated, amended or forwarded to a third party without consent from Insight Investment.
This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass.
Assumptions, opinions and estimates are provided for illustrative purposes only. They should not be relied upon as recommendations to buy or sell securities. Forecasts of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice.
The information and opinions are derived from proprietary and non-proprietary sources deemed by Insight Investment to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Insight Investment, its officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader.