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Trade Truce: What does it mean for my money?

Trade Truce: What does it mean for my money?
Tariffs and fines have disrupted trade between the US and China for almost a year, but now the leaders of the world’s two largest economies have reached a truce. For the next 90-days their trade dispute will be put on hold. But what does this mean for consumers and investors?

What is the trade war all about?

A friend of mine has a challenging tradition at Christmas – find presents which have not been made in China. It stems from a time when a relative travelled extensively in the orient and brought back cheap items of clothing which were emblazoned with popular Western logos. This “theft of intellectual property” greatly angered her.

But not as much as it angers Donald Trump. At a presidential rally in 2016 he said: “We can’t continue to allow China to rape our country, and that’s what they’re doing”. By 2018, his ranting and tweeting had escalated into a fully blown trade war. In September, the US announced a 10% tariff on $200bn worth of Chinese goods, with the promise to raise that to a 25% tariff at the start of 2019. China, unsurprisingly, retaliated with exorbitant tariffs on US goods and incentives for Asian and European countries to increase trade.

The problem, for the US,…

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