China-U.S. tariff dispute turns up a notch, raising credit

SINGAPORE - The impact of China's tariff proposals on its U.S. imports would be greater than that of the U.S. tariffs on Chinese imports, with the US$50 billion of goods affected represent 38% of U.S. exports to China, but only 10% of China's exports to the U.S., says ratings agency Standard
& Poor’s.

"Our base case doesn't factor in a Sino-U.S. trade war. We therefore consider the proposed tariffs are unlikely to materially threaten the economies or overall corporate credit health of either country," says S&P Global Ratings credit analyst, Terry Chan.

"However, the risk of a trade war is rising with the recent tit-for-tat retaliatory actions," said Mr. Chan. "A breakdown in trade negotiations and policy missteps could lead to a full-blown trade war that would damage global business and consumer confidence, investment prospects, and growth." 

“Should a flare-up in the trade dispute occur, we would need to re-analyse the impact on industry sectors not just for both countries, but also other trade-dependent nations.” www.standard&poor's.com (ATI).