Bloomberg Daybreak: Asia Edition APAC Stocks, US Futures Edge Higher After US-China Trade Talks
May 12, 2025
Jean Eric Salata, Chairman and Head of Private Credit at EQT Asia, shares insights on recent US-China trade talks, highlighting a collective commitment to further discussions. He discusses Japan's proactive engagement and the remarkable 5% rise in the Nikkei 225 since new tariffs were announced. Salata also explores the shifting investment landscape, with a growing focus on Asia and Europe as US markets face uncertainty. His take on regional diversification offers valuable perspective amidst these evolving trade dynamics.
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Market Optimism on Trade Talks
- Any positive step in US-China trade talks is good news given the prior situation's severity.
- The lifting of export controls and large orders were signs markets had anticipated some progress.
China's Deflation and Tariff Impact
- China is experiencing deflation impacting margins despite 8% export growth.
- High tariffs significantly reduce GDP growth, calling for big stimulus to avoid a sharp slowdown.
Gradual Economic Decoupling Insight
- The US and China are moving towards economic decoupling but aim to minimize mutual damage.
- Gradual bifurcation is preferred over abrupt trade conflict, reflecting a new globalization phase.