Now, we're back to where we started in tariff rates and in markets. That has Deutsche Bank wonder: What was the point of all of this?
They note that the latest data shows China exports to the US on a steady decline with April 2025 imports at the lowest in real terms since 2009.
"Previously, we were convinced they were likely to be very hawkish towards China and the two nations would continue to decouple and that the massive imbalance between the two nations' manufacturing output and the national security concerns would ensure the ideology remained throughout the term," writes DB multi-asset strategist Jim Reid."I'll be honest – I have more questions than answers at the moment but it seems that: (1) more pragmatic voices in the US administration have taken control again; (2) the near-term economy is being prioritised over the long-term security agenda; (3) the US needs trade to continue for now, and perhaps overestimated the leverage high tariffs would give them in extracting concessions.So were the last six weeks all a bad dream? Will the unpredictable nature of US policy continue or are we now on a more conventional path? Not sure I have the answers this morning but, if you're looking for positives, US policy does seem to have galvanised Europe, is encouraging China to rebalance towards consumption and Bessent has even discussed how the trade deficit may be partly being caused by the fiscal deficit. So maybe US policy has been a force for good?"That's a common sentiment.
This article was written by Adam Button at www.forexlive.com. Read More Details
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