Moody’s Investor Service revealed the agreement reached between the United States (US) and China to restart trade talks does not fundamentally change the credit rating agency’s outlook for the global economy.
World’ two largest economies have agreed to resume trade talks at the high-level meeting at the sidelines Group of 20 summits in Osaka, Japan, on Saturday (29/6). US president Donald Trump announced, he would hold off imposing an additional US$300 billion in tariffs after face to face meeting with Chinese president Xi Jinping.
“The agreement reached between President Trump and President Xi at the G20 summit to restart trade talks does not fundamentally change Moody’s outlook for the global economy,” Michael Taylor, Managing Director, Moody’s Investors Service said in a written statement on Monday (1/7).
Although the agreement will likely partially relieve recent negative sentiment in the financial markets and support near-term growth, it stops short of removing existing tariffs, Taylor opined.
Moody’s therefore, maintain its baseline view that the tariffs implemented to date will shave 0.1 percentage point off US growth and about 0.2 percentage point off China’s growth this year through direct trade channels.
