SINGAPORE (July 23): Trade tensions between the US and China have escalated over the past month, rattling global investors. But for market watchers such as William Yuen, investment director at Invesco, the actual kicking-in of the tariffs also represents some relief for the markets.

Speaking at a July 5 media briefing — a day before the US imposed 25% duties on US$34 billion ($46.3 billion) worth of Chinese goods — Yuen explains: “[When] the US actually implements the tariffs, then we cut out some of the uncertainty that the market is currently trying to digest. Ultimately, the stock market doesn’t like uncertainty… the implementation may actually be something the market may look forward to, despite the fact that it may not be that positive for both countries in the short term.”

As many expected, China immediately retaliated against the US’ move by slapping US$34 billion worth of American imports with 25% tariffs. On July 10, the US vowed to impose a 10% tariff on an additional US$200 billion worth of Chinese imports. That is more than China’s total imports from the US, which stood at US$130 billion for 2017. The tariffs are slated to be imposed after Aug 30, effectively leaving less than two months for the global giants to negotiate.

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