The US has rolled back some tariffs on other countries which is a
positive and measures announced By Donald Trump are less aggressive than
what we feared, said Chetan Ahya, Co-Head of Global Economics &
Chief Asia Economist at Morgan Stanley
He believes this is going to have moderate impact on trade &
growth. Previous experiences indicate impact of global trade war is not
severe, he believes.
"We need to see if this a move to eventually negotiate with China on tariffs," he said.
He further said US seems to have taken a targetted approach w.r.t Indian subsidies.
"We expect the Chinese to compromise w.r.t tariff imposition by US. For
now, we expecting tariff move against China to have only a modest
impact," Shaun Rein, Founder - CMR and Author of the War For China's
Wallet said.
He feels, the fear of full blown trade war is exaggerated and he expects both US & China to be pragmatic.
Richard Harris, Chief Executive, Port Shelter
Investment Management told that equity market is pricing in
the bad news w.r.t possible trade war and equity markets are doing what
they should be doing.
"You have to be bullish on US equities. I think there is still a goldilocks scenario in the US economy," he said.
Jahangir Aziz, Asia Economic Research at JPMorgan expects value of all items under higher tariffs should be USD 50 billion.
"We
need to see what items US imposes tariffs on with their aggregate
value. US' next move on IP protection is going to be significant to
track," he said.
Daniel Hynes, Senior Commodity Strategist at ANZ
Research said global trade moves could have wide ramifications for the
oil market.
Oil could spike higher due to declining inventories & geopolitical risk, he feels.
Brent crude futures were up 0.93 percent at USD 69.55 a barrel while US crude futures rose 1.09 percent to USD 65 a barrel.
Lewis Alexander of Nomura told CNBC-TV18 that Donald Trump's bark has
been worse than his bite' as recent developments are risky & can
spiral out of control.
"We have seen a desire by US' partners like
Europe & China to be proportional. If retaliation is proportional,
then don't think this is a disaster," he said.
Trump administration has crossed lines that have never been crossed before, he feels.
Ken
Peng of Asia Pacific Investment Strategist at Citi Private Bank told that MSCI China's exposure to US export revenue is 3 percent
and Chinese listed companies' revenue exposure to US is limited.
Hence, US' move on China tariff does not have to result in a bigger trade war, he feels.
He expects further downside in global markets for the near-term and doesn't expect this trade issue to be resolved very quickly.
He further expects intense volatility in global markets in the coming months.
Coming
back to India, fiscal worries are not resolved yet, he said, adding the
collateral damage in Indian & European markets should reverse.
"Its bit early to draw the conclusion that it's time to buy into India," Peng said.
Japan said it would closely watch US' moves on China tariffs and would keep seeking exemptions from US import tariffs.
"We
want to closely communicate with US over trade as retaliation against
US trade measures could destroy free trade system," it said, adding it
would consider necessary steps within WTO Framework.
China Commerce Ministry said we resolutely oppose US unilateralism, protectionism w.r.t Section 301 probe.
China has fully made preparations to defend its legitimate interests and doesn't want a trade war but is not afraid of one.
"We
hope US to be prudent in its decisions & will pull back 'from the
brink'," he said. China urges US not to take bilateral trade relations
to a 'Dangerous Place'.
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