Significant deterioration in US-China relationship a worry for everybody: Geoff Lewis

President Donald Trump targets China with up to USD 60 billion in Chinese import. The new measures are designed to penalize China for trade practices that the Trump administration says involve stealing American companies' intellectual property. In an interview to CNBC-TV18, Geoff Lewis, Global Strategist of Capital Markets Group at Manulife Asset Management shared his views on the same.

What we saw yesterday was just another warning, it is just a message from President Trump that it is time for China to seriously negotiate with the US side on some of these contentious issues that have been bothering the US administration, he said.

We are talking about 25 percent tariff on USD 60 billion of exports by China to the US. This is not a trade war by any stretch of imagination, it is more an indication that there are certain issues, which are causing discontent in the US-China trade relationship, which needs to be negotiated by both sides, he added.

We have never had a bear market in equities when earnings have been continuing to grow and when the word economy has been expanding by 3-4 percent each year. I think yesterday’s catalyst was probably more worries on trade and valuations which have been there for a long time, said Lewis.

It is a factor that markets are priced for everything going right. If we see a significant deterioration in the general US-China relationship, not just trade but maybe that kind of cold war in economic terms between the first and the second largest economies, that would be a worry for everybody, he further mentioned.