China Trade War and Minnesota Med-Tech

As reported by the Star Tribune:

The tariffs are designed to persuade the Chinese to halt practices that U.S. trade officials say are unfair and coercive, including the “forced transfer” of American technology and intellectual property. China reciprocated with a similar tariff package, causing President Donald Trump to threaten new tariffs on an additional $200 billion in goods.

That rapid escalation is causing anxiety for some med-tech executives because tit-for-tat responses can lead to a damaging trade war that could target medical devices directly.

“That is what we are most concerned about,” said Shaye Mandle, CEO of the Minnesota health technology trade group the Medical Alley Association. If a trade war develops, “to [get] access to that market, the cost is going to go up, and the push to absorb it is then going to be on companies that are exporting to China.”

With these building pressures, David Kelly, CHIEF GLOBAL STRATEGIST at JP Morgan discusses:

Higher valuations and uncertainty underscore the need for broad diversification and careful portfolio management

Despite continued political turmoil in 2017, risk assets produced generally positive returns, as indeed they have been on average over the past 15 years despite the global financial crisis and many other economic, geopolitical and financial disruptions. In 2018, cash is still paying close to nothing and global economic momentum and reasonable global stock valuations suggest that this is still a time to be overweight risk assets.

Having said this, it should be noted that many asset prices are higher than they were a year ago. Because of these higher valuations and potential dangers from policy mistakes or geopolitical risks, it will be even more important for investors to maintain well-diversified portfolios and be willing to make adjustments in response to changing valuations or the investment environment.

2018-06-26T09:07:50+00:00By |Categories: Economy, MedTech, Nathan Krampe|