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A Row Between US and China at the WTO Might Bring Back Risk Aversion Today

The trade war between the US and China seems to be getting heading toward an end from what we have heard recently. The two giants found a common ground at the G20 summit a few weeks back and China has agreed to start buying US agricultural products (soybeans mostly) and reduce tariffs on US cars from 40% to 15% where they were before the war started. Although, today we are seeing a bit of a clash between the two titans at the World Trade Organization (WTO). The US convoy made some comments about China and the WTO earlier in the morning and now the Chinese delegation is taking its turn. Let’s have a look at the comment:

Comments From US Delegation

  • Serious concerns with fundamental challenge posed by China’s state-led, mercantilist approach to economy and trade
  • China pursues non-market industrial policies and other unfair competitive practices aimed at restricting foreign companies
  • China’s approach is causing serious harm to the US and many other WTO members and their companies, workers
  • US rejects the notion and criticism by some countries that US approach is seen as “unilateralist” and “protectionist”
  • Reforms are necessary for the continued viability of the WTO and that US will be at the forefront of those efforts

Comments Form Chinese Delegation

  • China asks US to work on WTO reforms
  • Things can only work through consultations on equal grounds
  • US tariffs action are in violation of WTO rules
  • US tariffs are “bringing back to life ghost of unilateralism that has been dormant for decades”

Hmmm, Donald Trump has condemned the World Trade Organization since before he became President of the US and wants to dismantle it, while China is asking for a reformation. This might hurt the market sentiment after the soft tones in the G20 summit. Risk currencies such as commodity Dollars are reversing down after a small climb this morning while the JPY is getting stronger. These comments might set the tone for the day guys, so watch out for the sentiment and try to read it what way it might lean.

 

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Skerdian Meta
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Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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