The big story for the global markets this year has been tariffs, trade and the Fed. How is the trade story going to play out in 2020? What will be the Federal Reserve’s stance? CNBC's Kayla Tausche and Steve Liesman speak on the likely triggers for the next year.
According to Tausche, the Trump administration has rocked the trade boat in 2019 with unpredictable tariffs and short-lived truces.
"In 2020, international trade will move back to status quo. First, China tensions return to a simmer. Fireworks will fade when the US and China sign off on a phase one deal in early January and the second deal will remain for off but if China engages and enforces this first deal, expect tariffs to be rolled back slowly. Second, farm finances will be in focus as planting season gets underway American farmers will size up the pain of a 2-year trade war and new business with China, Mexico, Canada and Japan. Agriculture Secretary Sonny Perdue says more financial aid will be warranted if the agri-economy doesn’t play quickly. Third, Europe will be back in crosshairs as President Donald Trump’s re-election held on new target. The president’s speeches will be testing ground for new material on auto tariffs and energy sanctions," she observed.
Liesman noted that the trade war would be central to the outlook on 2020. "Uncertainties will remain but businesses need to invest and prosper. The Federal Reserve should remain on hold while much of this plays out," he said.