InvestorQ : What will be the impact of the trade deal signed between the US and China on the Indian stock market?
shrinidhi Rajan made post

What will be the impact of the trade deal signed between the US and China on the Indian stock market?

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Riya Dwivedi answered.
2 years ago
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You need to remember that as of now only Trump has signed off on the terms of the trade deal. China is yet to agree all the terms and agree upon it. This is expected to happen by end of Friday 13 December. Globally, the expectations are that the deal should happen over this weekend. Here is what the deal is expected entail.

· The much feared tariffs on an additional $150 billion of imports from China was supposed to kick in on December 15. That has now been put off as per the deal.

· The previous tariffs will be reduced in most cases from 25% to just 12.5%, something the Chinese exporters should be happy about.

· In return, China will substantially increase their purchase of agricultural products from the something likely to help Trump core voter constituency of the Mid-west farmers.

· Other issues like intellectual property rights for US products, the issue of Chinese government subsidies and the larger issues pertaining to Huawei have been kept off the table.

· As Trump has also confirmed, this will only be phase 1 of the trade deal and there could be multiple phases to this.

The global reaction has been very positive and it is expected that Indian markets should also react positively to this news. It surely brings greater level of global predictability to the markets.



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