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Phase One US - China Deal


Phase One of the US-China Deal Is a Boon for Dividend Stocks

Aaron Levitt Jan 23, 2020

After nearly two years of talks and false starts, the trade war between the United States and China has finally turned a positive corner. That’s because we finally have a so-called Phase One trade deal between the two nations. Signed with much fanfare, the deal sheds some light and provides answers to a few key issues plaguing the two superpowers. While Phase One is just the initial piece of a broader trade pact, the deal has some pretty broad implications and sets the ball rolling for future talks and continued progress between Asia’s Dragon economy and the United States.

For investors, it’s a major positive. The agreement removes one of the biggest overhangs affecting the market. This should lead to higher asset prices throughout the year and overall better economic growth.

For those seeking income, the deal is particularly interesting. With signs of easing out of trade concerns between the two nations, many dividend sectors should see higher revenues and lower costs of goods. This, ultimately, could lead to higher cash flows and real return to dividend growth.

In the end, the Phase One deal and the potential end of the trade war can only be seen as a positive for investors going forward.

Learn more about Trump’s steel tariffs here.

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