8 Aug 2019
US China Trade War: Tariffs
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
Our view on tariffs remains unchanged.
The theory is to protect domestic business and protect domestic jobs but in practice everybody loses.
The current US China Trade War began on the 22nd march 2018 when US President Donald Trump signed a memorandum under the Section 301 of the Trade Act of 1974 instructing the United States Trade Representative to apply tariffs on US$50 billion of Chinese goods due to Chinese theft of US intellectual property.
The attached brief provides context on the US China Trade War and highlights how normal and regular it is to have share market corrections (defined as fall of up to 20% fall from recent peak).
The burning question is whether this US China Trade War will devolve into a financial catastrophe or more commonly known as a share market crash (which is defined as a fall of greater than 20% from recent peak) and the answer is that we do not know.
For investors however the key with all of this market noise is to remain invested according to your appetite for volatility and then, when fear and panic take hold during the next financial catastrophe, to take advantage by buying more quality assets at discounted prices.
Click to read.
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