As the richest and most powerful convene in the Swiss Alps, will trade tensions ease and cool heads prevail.

The global elite are getting ready for Davos and the main question will be is there a trade war or is there no trade war?

The main culprits are China and the United States. They have come together for a tenuous truce which may seem to be declared very quietly. The Phase 1 section of the truce which was signed last week, helps to ease some of the Trump administration sanctions on China in return for Beijing’s vow to step up its purchases of American farm products and other goods that are in desperate need of fair trade. However, quite a few experts believe that this will go anywhere past the Phase one as they do not have any clear next steps and that is what they hope to work out during the Davos meetings. On top of everything that is going on with China and USA is the fact that Europe is having new elections.

Europeans with their trade surpluses in autos and luxury goods, could also be a tempting target for President Trump. Adding to the possible issues is that the Trump administration is not allowing any new members to WHO. Which means if certain countries have trade conflicts there is no governing body to hear the case.

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Economics, Finance and Investing