Trade escalation

Analysts are increasingly expecting the U.S./China trade dispute to turn into a war of attrition, with neither side willing to bow to pressure from the other. “The country that wins a trade war is the country that can endure most pain,” said Andrew Polk, co-founder of research firm Trivium China in Beijing, adding that China “thinks it can outlast the U.S.” because it doesn’t have elections to worry about. With President Donald Trump under pressure to appease his base ahead of the November mid-terms, President Xi Jinping determined to stick to his plan to make China a global technology leader, and neither side willing to appear weak by compromising first, a significant increase in tensions still seems the most likely outcome. 

 

Source: Bloomberg