Yesterday at the World Trade Organizations, arguments between the US and China representatives emerged. The dispute was caused mainly due to the claims of the US President Trump that China is stealing US ideas.
As soon as there was a hope that the US and China ‘trade war’ was under control, the US comes out with the statement that it would place huge disciplinary tariffs on Chinese goods. As it is known, licensing and administrative rules of China, forces the foreign companies to share the technology if they are looking to do business and government officials were able to employ ambiguous investment rules that would impose technology transfer requirements. According to the US Ambassador, Dennis Shea, the rules imposed are not rules of law and it is China’s laws that enable this pressure.
China has rejected the criticism and according to Reuters, it has stated that there is no forced technology transfer in China and that nothing in the regulatory measures does require a technology transfer from foreign companies. On this note, the US Trade Representatives have failed to produce any evidence and the claims are seen as pure speculation. It is evident that Washington needs WTO support in implementing the tariffs, while China has rejected the tariff plan and asked for WTO action to put a stop on it.
How the disputes will be settled is still to be seen, as the US failed a complaint to WTO on the 23rd of March and it is assumed that used the dispute meeting held yesterday to escalate the legal case. It is expected that China would do the same during the meeting to be held next month.
Looking at the macroeconomic news today, the markets are expected to be rather calm, with the only high impact news coming from the US with the CB consumer confidence later during the day.
ECONOMIC CALENDAR EVENTS FOR MAY 29th
EUR M3 Money Supply y/y
USD CB Consumer Confidence