Trade Tensions Weigh on Investor Sentiment in 2019, Says Coface's Casanova

The video discusses the implications of increasing tariffs on Chinese goods from 10% to 25%, highlighting potential negative impacts on US manufacturers due to the high percentage of intermediate goods involved. It also covers the People's Bank of China's (PBOC) measures to support the economy, such as liquidity provisions and targeted lending to smaller companies. The discussion concludes with an outlook on future economic stimulus, emphasizing targeted measures over broad stimulus to address ongoing trade tensions and support SMEs.

What is one reason why increasing tariffs from 10% to 25% might be counterproductive?

• The US imports a large portion of intermediate goods from China.

• The US has a trade surplus with China.

• China can easily retaliate with equal tariffs.

• Tariffs have no impact on US manufacturers.

What action has the PBOC taken to support the economy?

• Reduced tariffs on US goods.

• Provided lower-cost liquidity for banks lending to smaller companies.

• Implemented broad economic stimulus like in 2009.

• Increased interest rates significantly.

What is the expected approach of Chinese policymakers towards economic stimulus?

• Reducing lending to SMEs.

• Increasing tariffs on US goods.

• Focusing on targeted measures.

• Implementing broad stimulus measures.

What is the purpose of the targeted medium-term lending facility announced by China?

• To reduce the reserve requirement ratio.

• To raise interest rates for all sectors.

• To increase lending to SMEs.

• To decrease lending to large corporations.

Why might reserve requirement ratio cuts not happen immediately?

• The focus is on more targeted direct injections of cash.

• They are not considered effective.

• They are waiting for US approval.

• The PBOC has already cut them to zero.