Moody’s says US-China uncertainty may have economic impact beyond direct trade channels

Some comments by Moody’s in a statement

  • Tit-for-tat measures are causing rising uncertainty and political risk
  • That will likely have economic and financial impact beyond what is transmitted through direct trade channels
  • Risk of escalation has risen over the last few months
  • Believes that US and China will avoid a dramatic increase in trade restrictions
  • Further escalation in trade tensions will likely lead to more volatility in financial markets in the coming months
  • Risk of escalation could lead to reduced business investment and lower production efficiency
  • Further uncertainty could affect companies’ decisions
  • Such as global supply chains location, which in turn would affect investment and future export growth

A general overview of the situation a la Moody’s. Well, the reported measures up until now are not set in stone just yet – we have no exact dates. But no doubt that the uncertainty will already weigh in on companies and their contingency planning.

I reckon China’s response will be much like Wednesday, but they are not likely to go into much details yet until the US comes out with what the $100 billion worth of tariffs will target.

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