The ongoing worries about the US-China trade war continue to run high during the current US quarterly earnings season, with some companies as diverse as Juniper Networks and O`Reilly Automotive bemoaning the consequences but saying they are finding ways to weather the storm. Now the trade talks will be moving to Shanghai on Tuesday, with stock market investors sensitive to fallout from the year-long trade war – according to an article from CNBC and Reusters. Tariffs were mentioned in about a third of the conference calls held by S&P 500 companies reporting there results thought July 26, according to FactSet. The 71 firms flagging tariffs were up from 50 companies discussing tariffs from the same period in the first quarter, and this makes sense as this protracted trade war continues.
Our Views: This trade war will not end soon as the deep structural and long-term issues that are not easy to fix are rising to the top. The US wants technology protection as do the Japanese an EU. Intellectual copy rights are not going to be fixed and for now, neither is the court system. China must change and some of the smart Chinese leaders understand this. The Hawks are taking over in China and they are ready to fight the US for every new change in trade rules between the first and second largest economies on the planet. It will take another 5 years for trade issues to find common ground.
