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What is Kyle Bass’ view on the Trump–Xi summit on the sidelines of the G20?


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Kyle Bass does not expect anything significant to happen at this weekend’s trade summit between US President Donald Trump and Chinese President Xi Jinping and says investors should brace for the Trump administration to slap tariffs on the remaining Chinese goods.

According to Kyle Bass, the founder and managing director of Hayman Capital Management, a renowned hedge fund based in Texas, the best possible outcome that could emerge would be for both leaders to schedule for fresh talks, which would boost investor sentiment since neither would benefit from reaching a deal.

He says that while Xi can wait out Trump’s tenure, the US President does not have that leverage and in case he agrees to an imperfect deal, he will not only be attacked by the opposition, but will face immense scrutiny from Republicans as well, a situation he would prefer to avoid in his re-election year.

Bass says Washington will eventually lay tariffs on the remaining $300 billion Chinese imports and while the US Government would raise about $100-150bn annually, it is only a fraction of the two economies.

The fund manager is of the view that the advantage the Chinese had over the last few years has disappeared due to advancing wage growth, shipping and insurance costs, and although China’s growth has created demand for commodities like oil, food, and essential materials, the slowing economy will drag the US into a mild recession by the mid of next year.

Kyle’s advice to the average investor to overcome the downturn is to expand investments into real assets like gold and real estate. He says the recent surge in the prices of gold and cryptocurrencies like bitcoin could just be the beginning, as “everyone sees the writing on the wall.”

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