“The most important element of this deal is what didn't happen: further tariffs,' says Gregory Daco, chief U.S. economist at Oxford Economics. 'The risk of more tariffs isn’t going to materialize and that’s the biggest gain for Americans.”
Trump’s tariffs on Chinese products were fully passed on to U.S. consumers and corporations in all industries except steel, according to aStill, consumer spending, which accounts for more than two-thirds of U.S. economic activity, has remained strong. Unemployment has fallen to a half-century low, helping to offset a slowdown in manufacturing during the long-simmering trade dispute.
The trade rift has shaved off roughly 0.5% of U.S. gross domestic product, according to Goldman Sachs Global Investment Research. Ham, of New England Investment and Retirement Group, doesn't expect an immediate rebound in manufacturing after the"Phase 1" deal, but at least some of the pain will stop."Even a partial rollback in tariffs could help earnings this year," he says.
With volatility expected to pick up on further trade talks, investors should consider rebalancing their portfolios after last year’s strong stock market gains, some financial planners say. Major averages have risen on hopes that a rollback in tariffs could help boost corporate profits and business investment. But stocks briefly eased from records this week on concerns that some aspects of the trade deal were less than what Wall Street was anticipating.
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