Recent statements from the Trump administration suggest that the United States (SPY) and China (FXI) might resolve their trade disputes. The two sides have held four rounds of talks since US President Donald Trump and Chinese President Xi Jinping agreed on a 90-day truce last year. Trump has also postponed the proposed tariff hike that was scheduled this month.
To be sure, getting favorable deals from trading partners was among Trump’s key pre-election platforms. The Trump administration has already renegotiated NAFTA and KORUS (United States-Korea Free Trade Agreement). Last year, Trump adopted a carpet-bombing strategy with Section 232 tariffs that targeted all trading partners. However, after those tariffs, the administration’s energy was focused on the China trade deal (BABA) (BIDU).
Now, as the China trade deal looks likely this month, Trump is looking at new targets. Trump is planning to end preferential trade treatment for India (EPI) (EEM). In a letter to congressional leaders, Trump said, “I am taking this step because, after intensive engagement between the United States and the government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India.”
The European Union (VGK) (EZU) and Japan (EWJ) could be next on Trump’s radar. Last month, the Commerce Department submitted its investigation into automotive imports to Trump. If Trump decides to impose tariffs on automotive imports (F) (TSLA) (NIO), Japanese (TM) and European automotive companies could be hit.
Meanwhile, US equity markets have looked strong so far. Apple (AAPL), NVIDIA (NVDA), Advanced Micro Devices (AMD), General Electric (GE), and Boeing (BA) have respectively gained 11.9%, 17.6%, 26.6%, 42.6%, and 34.8% year-to-date based on their closing prices on March 4.
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