Mutual respect, equality crucial for US-China truce, say AmBank Research

Its chief economist and head AmBank Research Anthony Dass said the current temporary halt is not a suspension of the trade war but a suspension of the escalation of the trade war.

KUALA LUMPUR: The US and China must adopt an attitude of mutual respect and equality during the current 90-day truce in the trade war to enable constructive dialogue to reduce their differences, says AmBank Research.

Its chief economist and head AmBank Research Anthony Dass said the current temporary halt is not a suspension of the trade war but a suspension of the escalation of the trade war. 

“And the big questions remain about the readiness by China to allow international access to their huge market to a level that will please US administration and hence prompt the US to completely halt in the trade war.

“Any easing of tensions on trade could ease gains in the US$ and boost riskier assets including emerging-market currencies and stocks, though we feel the US and China are trying to fix a long-term problem that cannot be solved in the near term,” he said.

He hoped this meeting, under the current situation, will achieve an important and positive effect on bilateral relations. 

Anthony said in AmBank Research's view, China has hardly given up anything in this deal because the future tariffs threatened from China would be retaliatory in nature and only to be applied if the US escalated. 

Hence, China has gained a 90-day reprieve where both sides have pledged to open up talks and have agreed to open up each other's markets.