The tit-for-tat trade tariffs between the United States and China are expected to end in August 2020 because the US presidential election will be only months away at that time, says an economist.
The trade spat should end five months before the 2020 presidential election, said Boontham Rajitpinyolert, an independent macroeconomics analyst.
The conflict is having an effect on exports and could shave one percentage point off Thailand's economic growth in a worst-case scenario.
US President Donald Trump's declaration of a ban on Huawei is the peak of the rift between the two huge economies, and development of the issue and how China will strike back against the US are in focus, Mr Boontham said.
The US launched a trade war that has spilled over into tech and currency wars, and these are the means by which the world's largest economy attacks countries it has a large trade surplus with, he said.
The market now believes that Vietnam may be the next target of US tariffs, since the Southeast Asian country has had a trade surplus with the US for nine straight years. Taiwan is another potential target.
Mr Trump recently threatened to impose tariffs on products from Vietnam.
Therdsak Thaveeteeratham, executive vice-president for Asia Plus Securities, said geopolitics and trade conflicts add risk to the global economy, taking a toll on growth, so investors are recommended to scoop up local stocks engaged in sectors hardly affected by external factors, as well as dividend plays with yields of 3% or above.
Given that real estate investment trusts' and property funds' unit prices have risen, investors should shun them and pick other low-risk asset classes, he said.
Food exporters and industrial estates are winners from the trade spat, while petrochemical, automotive, electronics, property, ICT, retail and tourism are losers, Mr Therdsak said.
The SET index is expected to claw back to 1,700 later this year, driven largely by fund inflows, he said. A rally could be in store if listed firms' net profits fare better than analysts' forecasts.
