In the fast-paced world of markets and politics these days, the idea of a “trade war” seems to have been downgraded to a “trade skirmish.” And we may even be heading to just a “trade disagreement” next.

Here's where we're at right now: The Trump Administration has at least temporarily exempted 53 percent of its U.S. iron, steel and aluminum imports from the recently announced tariffs. There are various reasons why exemptions have been granted - and various negotiating stances for each country and region - but it stands to reason that the full picture is still emerging from this situation. Interestingly, the tariff announcements made big headlines but the exemptions were more likely to be reported as smaller stories in the financial press.

As the trade picture emerges, we will no doubt see more backroom horse trading as we move into a new global trade paradigm. In that context, there was an interesting side agreement that was entered into as part of this week's trade pact with South Korea.

The U.S. has been concerned about currency intervention from South Korea. As proof, the U.S. noted in the agreement that in addition to a large current account surplus, South Korea's reserves have quadrupled since 2000, and its GDP has nearly tripled. The significance of these stats is that they may result from large purchases of U.S. dollars made in order to weaken the Korean won.

In what could be a related note, a recent private survey of Chinese exporters showed they are feeling good about business, although a lot of that positive sentiment could be attributed to strong U.S. and global growth. However, one-third of those surveyed said the appreciation of the Chinese currency – the renminbi – was a problem for their businesses. That's the highest number reported since August 2014.

This is important as we move forward with trade negotiations – and struggles - with China. The Chinese government has for years tried to get its exporters to become accustomed to the concept of managing their own currency risk rather than rely on the government to weaken the currency. With the spotlight increasingly focused on China's trade practices, this effort will inevitably return as a focal point of tensions.

My View: In another place and time, currency agreements were addressed on a multilateral basis – witness the Bretton Woods system, Plaza Account, and other historical examples. But I doubt we will see a repeat of that dynamic in the near future. What could be interesting is whether or not we end up with a new global currency paradigm, but built by a series of bi-lateral agreements rather than a multi-lateral format.

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