December 17, 2019 / 10:38 AM / 2 months ago

U.S.-China trade tensions eased, but not resolved - Fitch

FILE PHOTO: Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019. REUTERS/Aly Song

(Reuters) - The “phase one” trade deal between the United States and China has eased trade tensions but renewed escalation remains a significant risk, Fitch Ratings agency said on Tuesday.

Tensions between Washington and Beijing, particularly in fields such as technology, will pose a major obstacle to full resolution of the trade war, Fitch said.

The rating agency said it now expects China’s economy to grow by close to 6% in 2020, compared with its earlier forecast of 5.7%, following the initial trade deal.

China’s economic growth had cooled to a near 30-year low of 6% in the third quarter as the bruising trade war hit factory production.

The United States and China last week cooled their trade tussle by announcing a preliminary trade deal that reduced some U.S. tariffs on Chinese goods in exchange for Chinese purchases of American farm products and other goods.

Reporting by Bhargav Acharya in Bengaluru; Editing by Aditya Soni

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