Bloomberg Daybreak: Asia Edition APAC Markets Look to the Trump Trade, Fed Decision
4 snips
Nov 7, 2024 
In this conversation, John Liu, Bloomberg News Executive Editor for Greater China, and Tim Pagliara, Chief Investment Officer at CapWealth, delve into the intricacies of U.S. trade policies post-Trump's political gains. They discuss how these changes may reshape the U.S.-China trade relationship and China's economic strategies. The duo highlights prospective market reactions to a potential Trump presidency, including effects on small-cap stocks and investment opportunities influenced by new Federal Reserve actions and economic conditions.
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China Knows The Playbook But Faces Big Hits
- China has experience from the previous U.S.-China trade war and understands likely negotiation points.
- But 60% tariffs could cut about 2.5 percentage points off China's GDP and materially slow growth.
U.S. Holds Short-Term Leverage In Talks
- The U.S. holds negotiating leverage because China still relies on foreign markets to create jobs and demand.
- China is trying to reduce that dependency, but the transition will take time and won't be quick.
China Racing To Build Domestic Tech Capacity
- Beijing fears losing further access to U.S. and Western technology and is investing heavily to build domestic alternatives.
- Those efforts require substantial time and won't replace advanced tech quickly.