Fitch's Caution on US-China Trade Relations

The rating agency Fitch highlighted on Tuesday that the recent positive shifts in trade relations between China and the United States should not be mistaken for a return to "normalization." The agency emphasized the ongoing uncertainties and risks that loom over the global economy.

Key Concerns Highlighted by Fitch: Without a lasting agreement, the uncertainty surrounding future tariff rates and the effects of those already in place will continue to be pivotal in shaping macroeconomic forecasts. This comes in the wake of a 0.3% contraction in the US GDP during the first quarter, partly due to a surge in imports ahead of anticipated tariff increases.

While the recent rollback of tariffs may mitigate some economic pressures, Fitch pointed out that global trade and supply chains remain in a precarious position, vulnerable to further disruptions.