One may question its legitimacy and its relevance, it is nevertheless difficult to deny that the impeachment process started by the Democrats against Republican President Donald Trump is somewhat damaging the deal-building effort between Washington and Beijing.
While celebrating the 70th anniversary of its communist regime, the Chinese government is likely gauging whether its U.S. counterpart’s “democratic mire” opens a tactical window of opportunity regarding the tough bilateral trade talks since Nancy Pelosi launched the fourth impeachment procedure in U.S. history.
But the weapon may well be double-edged and as Hillary Clinton said, don’t jump to conclusions because the political crisis could disrupt the Trump administration and undermine its ability to reach an agreement with the Xi administration.
Just as the political crisis could prompt Donald Trump to double down against Beijing, such as the memo purportedly circulating inside the White House and that would raise the question of limiting the access of U.S. investors to listed Chinese companies.
Conversely, Donald Trump could blow some steam off in order to quickly reach a bilateral trade agreement and introduce this as yet another achievement to be added to his mandate’s record for the purpose of his re-election campaign for 2020 but, according to Cyceon, that hypothesis seems more unlikely than tougher talks ahead.
The only certainty is that the acrimony that is agitating Washington could favor Beijing’s business in the medium term, considering that in the business world, democratic uncertainty sometimes weighs less heavily than authoritarian stability.
Cyceon.com and all its contents are for information purpose only and therefore do not constitute investment advice.