巴黎银行-美股-宏观策略-中美贸易：无休无止-20190506-9页_1mb

US-China Trade Summary

Core Content

This document provides an analysis of the ongoing US-China trade negotiations as of May 6, 2019. It outlines the current state of discussions, the potential for a deal, and the risks and structural issues that could impede progress. The report also includes broader implications for trade policy, including the possibility of new tariffs and the continued use of trade tools by the Trump administration.

Key Messages

• On May 5, President Trump threatened to increase existing tariffs on Chinese imports to 25%, signaling continued pressure on China.
• Despite recent positive sentiments from Treasury Secretary Mnuchin and USTR Lighthizer, the president's tweet indicates dissatisfaction with the pace of negotiations.
• A deal is still expected this quarter, but uncertainty around timing, tariff treatment, and content has increased.
• Structural issues such as technology transfer, IP protection, and enforcement mechanisms remain unresolved and could derail negotiations.
• The report suggests that a comprehensive agreement is unlikely, and any deal will be partial, with further disagreements expected.

Main Points

Structural Stickiness

• The US-China trade negotiations face persistent challenges, particularly around:
  • Technology Transfer and IP Protection: These remain core points of contention.
  • Enforcement Mechanisms: The scope and effectiveness of these are still under discussion.
  • Administrative vs. Legislative Concessions: China's preference for administrative changes over legislative ones is a potential hurdle.
• The report notes that the negotiations are at a critical stage, with the president describing the process as moving "too slowly."
• The lack of a clear path on these issues has led to the conclusion that a comprehensive trade deal is unlikely.

Tariff Man vs. Market Man

• President Trump continues to view tariffs as a useful tool for boosting US growth and has expressed a preference for their use.
• The tweet introduces a Friday deadline for increasing tariffs, which could lead to a chaotic implementation or reduced credibility.
• The administration is likely to push ahead with tariffs, even if they are not immediately implemented, due to the perceived benefits to the US economy.
• The report anticipates that the US might still face trade uncertainty, even with a deal in progress, as other trade issues with the EU and Japan remain unresolved.

Uncertainty and Risk

• The risk of delays in the trade deal has increased, especially if China postpones further discussions.
• The G20 meeting in late June is a key deadline for a potential agreement.
• If the deal is delayed, it may retain tariffs, making it less favorable to markets than originally anticipated.
• The president's frustration with the negotiation speed suggests that the final agreement will not be comprehensive.

Additional Information

• The document is produced by BNP Paribas and includes disclaimers and disclosures related to its use as a marketing communication, not investment research.
• It is intended for Professional Clients and Eligible Counterparties as defined under MiFID II.
• The report includes important disclosures regarding:
  • Options and ETFs: These are complex instruments and come with significant risks.
  • Restricted Securities: Some securities discussed may not be registered under US law and are only available to Qualified Institutional Buyers (QIBs) or non-US persons.
  • Confidentiality and Conflicts of Interest: BNPP may have financial interests in the companies or instruments discussed, and may engage in transactions that could conflict with the report's views.

Legal and Regulatory Context

• The report includes important regulatory disclosures for various jurisdictions:
  • United States: Emphasizes that the report is distributed only to certain qualified investors and may involve unregistered securities.
  • United Kingdom: Notes that the report is communicated by BNPP London Branch and is subject to limited regulation.
  • France, Germany, Belgium, Italy, Netherlands: Each jurisdiction has specific regulatory requirements and disclosures related to the distribution and supervision of the report.

Conclusion

The report underscores the ongoing complexity and uncertainty in US-China trade negotiations, highlighting that while a deal is still expected, it is likely to be non-comprehensive and subject to delays. The Trump administration's continued use of tariffs as a policy tool and the structural issues that remain unresolved are key factors influencing the outcome. The report serves as both an analysis and a marketing communication, with important legal and investment-related disclosures for all readers.