- Fitch said a full-blown trade war between the countries can create risks for corporations in the Asia Pacific region
BENGALURU: Global rating agencies Moody鈥檚 Investors Service and Fitch Ratings said on Wednesday the proposed US tariffs will have limited direct impact on China鈥檚 economy and a negotiated solution is most likely.
Chinese President Xi Jinping had pledged on Tuesday to open the economy further and lower tariffs on products including cars in a speech seen as a conciliation amid rising trade tensions between the top two economies.
Moody鈥檚 said it expects the US and China will prevent a significant escalation in their trade dispute going by the negative impact the restrictions will have on both economies.
鈥淭rade has made a smaller contribution to China鈥檚 GDP growth in recent years and, combined with a changing trade structure, China鈥檚 direct vulnerability to potential trade shocks has declined,鈥� Moody鈥檚 said in a report.
Last week, Washington threatened China with tariffs on $50 billion in Chinese goods aimed at making Beijing address what the US calls deeply entrenched theft of US intellectual property and forced technology transfers from its companies.
鈥淭he currently implemented US trade measures will impact only a relatively small portion of Chinese exports to the US, and we expect them to have a direct but contained effect on China鈥檚 economy,鈥� Moody鈥檚 said.
A full-blown trade war between the countries can create risks for corporations in the Asia Pacific region, Fitch said.
US President Donald Trump has been critical of China鈥檚 trade policies, criticizing China on Monday for maintaining 25 percent auto import tariffs compared to the US鈥� 2.5 percent duties, calling such a relationship with China not free trade but 鈥渟tupid trade.鈥�