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Analysts from Deutsche Bank predict that Macau's casino industry will remain largely unaffected by U.S.-China relations, forecasting a 5.3% growth in gross gaming revenue by 2025. Despite ongoing geopolitical concerns and the historical impact of trade tariffs, the current market dynamics, particularly the diminished role of the VIP segment, suggest that these issues will not significantly alter Macau's economic fundamentals. Meanwhile, Donald Trump's anticipated foreign policy approach may introduce new tariff threats, but the analysts believe these will have limited repercussions for Macau's gaming sector.
U.S-China Relations Under New Trump Administration To Have Little Impact In Macau
Asia Gaming Brief | January 8, 2025
In a recent report by Deutsche Bank analysts Carlo Santarelli and Steven Pizzella, the brokerage forecasts Macau’s GGR to grow by 5.3 percent in 2025, slightly below the consensus estimate of 7.4 percent. Geopolitical concerns, including U.S-China relations in the new Trump administration, continue to loom over Macau’s casino sector, but Santarelli and Pizzella argue that these issues will have little direct impact on Macau’s fundamentals, despite heightened sensitivity to such factors affecting investor sentiment.
The report draws parallels to 2018, when U.S-China trade tariffs coincided with a challenging year for Macau stocks. However, the reduced importance of the VIP market today makes such correlations less relevant, note the analysts. “One can surmise that the tariff implementations in 2018 had an impact on the VIP market in 2019, though, given the reduced importance of the VIP market today, and the confluence of other factors impacting the VIP market in 2019, we don’t believe this is a rational concern”, the analysts concluded.
In Dealing With China, Trump Just Needs To Step Up His First-Term Approach
The Strategist | January 8, 2025
As in his first term, Donald Trump should continue a resolute approach toward China in his second term. This approach was and is grounded in the belief that a more assertive posture will deter China’s expansionist ambitions, reinforce U.S credibility among allies and safeguard economic and technological leadership. Trump’s track record and cabinet nominations suggest a consistent approach moving forward, with several initiatives needing only formal adoption or targeted reinforcement of existing policies.
The United States should, and under Trump’s leadership again probably will, prioritise four key objectives: counter Chinese advances in the Indo-Pacific, insist on Taiwanese self-defence, oppose Beijing’s predatory economic practices, and compete in economic and technological development. Key priorities of the first administration included promoting U.S interests, economic prosperity and preserving peace through strength. Trump’s proposed foreign policy team for his second administration, including Senator Marco Rubio as secretary of state and Michael Waltz as national security advisor, signals a maintained firm stance on China, reflecting the general trajectory of the first term.
How Trump Could Strike A Trade Deal With China
Foreign Policy | January 8, 2025
U.S. President-elect Donald Trump has threatened tariff hikes on the United States’ largest trading partners, but China seems to be in the most immediate line of fire as his inauguration approaches. Late last year, Trump announced plans to impose an additional 10 percent tariff on Chinese imports, citing Beijing’s inadequate efforts to curtail the fentanyl trade.
Trump has repeatedly argued that China has stolen U.S. jobs and industries and taken advantage of the United States, leading him to threaten increased tariffs of 60 percent or more on the campaign trail. The tariff proposals don’t stop there: There is growing interest within Congress to revoke China’s current “permanent normal trade telations” (PNTR) tariff status—a move supported by Trump’s nominee for U.S. trade representative, Jamieson Greer.
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