The United States is set to launch a series of trade talks in the near future to support stock markets and reduce the risk of a recession. President Donald Trump has imposed a flat 10% tariff on most trading partners for 90 days, while offering exemptions for strategic industries to speed up talks.
China is expected to be a key focus of the talks, although a final agreement is still far off. Trump has granted relief on some Chinese electronics, while Beijing has made few concessions in response. According to BCA Research, China is expected to be ready to negotiate if economic data shows a significant impact from US tariffs.
Talks with close allies such as Canada, Japan and South Korea are also expected to move quickly. Domestic political factors, including elections and inflationary pressures in these countries, are expected to push them to conclude negotiations. If successful, it could cover about 28% of the US trade deficit.
In Eastern Europe, BCA expects Russia to accept a ceasefire agreement in Ukraine due to the economic burden and increasingly unbearable costs of the war. Russia's move is expected to ease pressure on global markets, while the US maintains its military support for Ukraine.
For investors, BCA warned that geopolitical tensions and weak global economic data will continue to weigh on markets. Europe needs a major boost before it can outperform the US market.
