Billionaire private equity investor Stephen Schwarzman believes that when it comes to the phase two trade deal between the U.S. and China, it’s all about the ‘when’ instead of ‘if’.
The CEO of Blackstone (BX) has been actively involved in the trade negotiations between the U.S. and China, and even received a shout out from President Donald Trump during the signing of the long-awaited ‘Phase One’ provisional agreement.
Explaining the outlook for the deal’s implementation — especially with the world’s second largest economy being ravaged by the coronavirus — he told Yahoo Finance that “the question is timing.”
"I think both countries, U.S. and China, are anticipating doing a phase two agreement to move things along further,” Schwarzman told Yahoo Finance in a wide-ranging interview. According to the CEO, a second deal would likely lead to a rollback of tariffs — something China did in part just this week.
“It's really in everyone's interest to do that," Schwarzman added.
In his best-selling memoir, "What It Takes: Lessons in the Pursuit of Excellence," Schwarzman wrote that the trade talks between the U.S. and China are "some of the most complicated negotiations" that the dealmaker has ever experienced.
The question right now is the timing of a theoretical phase two agreement. China’s fight against a mysterious viral infection that’s infected hundreds of thousands — and killed over 600 people — is clouding the near term outlook.
"Right now, things in China, of course, are made extremely complicated by the coronavirus," the investor said, an acknowledgement of the fear that’s gripping the world’s second largest economy amid the crisis.
Investors punished Chinese stocks after the Lunar New Year hiatus — something Schwarzman argued needed to happen “because keeping markets open and letting things just work is what developing countries do to become developed countries, you know, like the Europeans and the U.S.”
The investor said recognized the risk of the highly contagious virus, but he expressed optimism that it can “hopefully be contained.”
He added: “The Chinese government is definitely trying to do that, as you can see. And other countries, each in their own way, are trying to limit the spread.”
Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.
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