Signs of strain

Sep 02, 2020 | Jay Zhang


Share

With the Trump administration taking a tough stance on trade issues, tensions between the U.S. and China remain high despite recent hopes of progress.

RBC DS-LIGHT HOUSE

Tension headache


The headlines about U.S.-China trade relations seemed encouraging early this week. Both sides expressed optimism on the Phase 1 trade deal as they held the first direct call between trade officials since the deal was signed early this year.
But despite this progress, U.S.-China relations remain under stress. Two days after the call, the Chinese military fired two missiles into the South China Sea. The move came after China said a U.S. U-2 spy plane entered a no-fly zone without permission during a Chinese live-fire naval drill in the Bohai Sea off its northern coast. The U.S. confirmed a U-2 flight in the region, but said it did not violate international rules.
The sources of friction between both countries are deeply engrained, and the conflict has moved past tough rhetoric. Observers in both the U.S. and China now talk of the potential decoupling of the two countries’ economies, going well beyond the rejigging of supply chains. Recent actions point to attempts to sever more commercial ties between the two countries, particularly in the tech industry.

 

Market pulse
3 Major shake-up in the Dow Jones
3 How the Canadian banks are looking post Q3 results
4 German business sentiment continues to rebound
4 U.S. and China have a constructive dialogue on trade

 

Click here to read the full article