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America And China Reach A Weak Economic Détente

Bruce Wilds profile picture
Bruce Wilds

Détente is the easing of strained relations, especially in a political situation, in this case, it is more economical. The "Mother Of All Dinners" or the most important, and much-anticipated dinner date between Trump and Xi in years concluded amid loud applause. The "brief celebrations" by both sides and the idea this has ended the ongoing trade war between America and China with three-month truce is a bit simplistic and rather optimistic. The US agreed to postpone a planned tariff hike on January first and to keep the rate on existing tariffs at 10% for another 90 days in return for greater purchases of American goods nothing has been resolved.

This temporary ceasefire and what Trump declared an "incredible deal" on Air Force One while heading back to the U.S was based on China agreeing to immediately start purchasing "very substantial" U.S. agricultural, energy, industrial and other products from the U.S. to reduce the trade imbalance. Ironically, the deficit has soared in recent months as Chinese exports soared in an effort to front run announced tariffs and at the same time shunned imports from America. This means the trade deficit will only fall slightly but provides relief to both leaders who face slumping stock markets; aside from preserving the status quo on the current state of the trade war, it does nothing to change the fundamental divide that exists.

Despite the lack of material progress, this most likely will help to lessen immediate concerns that escalating trade tensions will create a new Cold War. Still, with less than a month left in the year, many traders are taking this as the green-light for a strong Santa Claus Rally, both in the U.S. and China where overnight the China Financial Futures Exchange sent a strong hint to investors to get back in the market by cutting margin

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Bruce Wilds profile picture
Bruce Wilds is an independent businessman and licensed general contractor that owns real estate in the Midwest, his holdings include apartments, retail space, and office complexes. He has invested in several businesses and traded both commodities and stocks for several decades. Wilds considers himself well anchored to reality and the economy as he maintains, designs, and leases buildings. His work has made him keenly aware of rapidly changing lifestyles and trends in new business formation. The not for profit blog he maintains incorporates many of the experiences and knowledge garnered from his hands-on business style, extensive travels, and studies of history, politics and economics. Bruce Wilds is also the author of the book "Advancing Time", the book focuses on how the ever quickening pace of change impacts today’s society and the massive challenges it creates. He feels that it is crucial we understand that we are living in a unique era the likes never before experienced by past generations. History viewed in the framework of mans time on earth forms the crux of this somewhat radical perspective. Journeys from the beginning of man to our current state helps us make sense of our fast changing chaotic world. Advancing Time illuminates the responsibilities society faces. Used as a tool Wilds wrote it with the hope it would help clarifies the choices before mankind, guiding and giving hope to those who want to have a positive impact.

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