UNCERTAINTY IS STILL THE “BIGGEST FACTOR”
Despite the “good news” that the trade war seems to be de-escalating, Mr Gan repeatedly pointed to uncertainty in the global economy.
He acknowledged that tariffs between the US and China have come down, and described them as “encouraging developments”.
The US and China recently agreed to slash sweeping tariffs for 90 days after meeting for talks in Geneva.
“I should sound a word of caution, because the outlook remains very uncertain,” Mr Gan said.
“What will happen at the end of 90 days is still a big question mark, is yet to be known, and whether the negotiation with the other countries will progress smoothly, whether they will eventually settle at a level that are mutually agreeable and workable, is something that is still yet to be seen.”
He added that the discussion between the world’s two largest economies is a “starting point” for what’s likely to be quite a long journey.
“The fact that the US and China had a discussion at the negotiating table (is) encouraging, but it’s too early to tell what the outcome will be, and the uncertainty remains,” he told reporters, adding that many businesses cannot make decisions because they do not know what the endpoint is.
“If it’s a firm tariff, it is easier for them to calculate whether it’s viable, not viable, whether they should export or not export … It will be painful, but it is at least certain.
“If tariffs are introduced and then removed at will and without rules, and I think it’s very difficult for the businessman to make a decision,” he said.
