Even if the Trump Administration strikes a phase one trade deal with China, future negotiations will be very difficult, says Jamie Dimon.
Although Dimon, head of JPMorgan Chase, indicated that he is optimistic about a phase one agreement to ease the US-China trade war, he suggested that “it will be very hard to have a real negotiated deal after that.”
The White House has said that such an initial pact is close, yet its contours remain murky. Beijing’s commerce ministry stated month that removing existing tariffs is a vital condition to any deal. From Washington’s perspective, a phase one pact would entail larger Chinese purchases of U.S. farm goods, as well better access to China’s financial services industry and promises to shield intellectual property.
The American demands may be harder to push through, Dimon said in remarks to reporters in Washington, where he was present for a meeting of the Business Roundtable, a trade group that he chairs. But he added that the Chinese regime seems to be opening its financial sector somewhat.
Most immediately the top concern is whether President Donald Trump will go ahead and slap an extra $160 billion in tariffs on imported Chinese consumer items, such as smartphones and toys. This move is slated to happen on Sunday. Both Chinese and American officials have said it likely will be postponed, but Trump has not weighed in on what he will do.
If the new round of levies is put in place, Dimon said “it will be a negative in the marketplace and a small negative” for US and world economic growth. “There’s no question that the imposition of additional tariffs on December 15 will have a dampening effect on economic activity and a further dampening effect on CEO optimism.”
The bank chief said the largest risk going forward from a continuing trade war was its effect on American consumers, who thus far have been in a buoyant mood.