Trump says could 'decouple' and not do business with China – Reuters

Reuters reports that the US President Donald Trump, in a Fox News interview airing Sunday, raised the possibility of decoupling the US economy from China, a major purchaser of US goods.

In a video excerpt, Trump initially told interviewer Steve Hilton “we don’t have to” do business with China, and then later said about decoupling: “Well it’s something that if they don’t treat us right I would certainly, I would certainly do that.”

Trump entered into a high-stakes trade war with China before reaching a partial Phase 1 trade deal in January. Trump has since shut the door on Phase 2 negotiations, saying he was unhappy with Beijing’s handling of the pandemic.

In June US Treasury Secretary Steven Mnuchin said a decoupling of the US and Chinese economies will result if US companies are not allowed to compete on a fair and level basis in China’s economy.

Market implications

These types of comments have not impacted the market in the recent past and are unlikely to do so this week where investors will have already ear marked the Jackson Hole as the event to watch for.

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