Why now is the time for a trade truce

Please see below the latest ‘Chart of the Week’ from State Street Global Markets.


This week Michael Metcalfe, global head of Macro Strategy, asks who is winning the trade war. He comments, “If the sentiment of manufacturers is any guide, the US is losing out more from the escalation of the trade war. US manufacturing sentiment has collapsed in the past nine months, spectacularly so in the last quarter. Meanwhile, their Chinese counterparts, at least by the official measure, are no less cautious than they were at the beginning of the year. Meanwhile, the Caixin/Markit purchasing manager index is even more bullish with sentiment at its highest level in two years.

“This recent data appears to corroborate the findings of a new paper, Tariff Passthrough at the Border and at the Store: Evidence from US Trade Policy, from Harvard University, the University of Chicago and the Federal Reserve Bank of Boston in which Alberto Cavallo and his co-authors find that the impact of the tariffs have fallen largely on the US.

“If economic rationale was a key driver, the pressure to agree a trade truce soon is growing. The only question now is when the economic rationale will coincide with the immediate political need.”

Investing involves risk including the risk of loss of principal.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon.  You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

The views expressed in this material are the views of State Street through the period ended August 28, 2019 and are subject to change based on market and other conditions.

This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those set forth in State Street's 2015 annual report and subsequent SEC filings.  State Street encourages investors to read the corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, August 28, 2019 and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

State Street Corporation One Lincoln Street, Boston, MA 02111-2900.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without State Street’s express written consent.

© 2019 State Street Corporation - All Rights Reserved


Expiration date: November 30, 2020

Tracking Number: 2809071.1.1.GBL.RTL

Media Contacts

Contact a member of the State Street Media Relations Team.

Social Media

Business Wire NewsHQ℠