Three Scenarios for the Future of US-China Trade Tensions (NN Investment Partners)

• Following the recent flare-up in US-China tensions, we have identified three potential outcomes
• An extended escalation phase looks more likely than a quick deal or an all-out trade war
• Prolonged escalation would be manageable in the short term but open the door to longer-term risks

The market rebound in the first four months of this year can be largely explained by two factors: The dovish pivot by the Fed, which other central banks have also copied, and the widespread perception that trade risks had diminished as the US and China were closing in on a deal. This last presumption is now clearly on shaky ground, and NN Investment Partners has identified three possible scenarios. READ MORE

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