Washington: The trade war between the United States and China will be intensifying by the day and it will have gory effects on the world economy resulting in ‘blood on the streets’, was the disturbing warning issued by US-based economist and investor Mark Mobius. US President Donald Trump’s statements against China have become sharper over the last few months and he has also claimed that the personal ties with the Chinese President have ended as well. Likewise, China which is firing salvos of criticism at President Trump, has cancelled the defence and trade-related negotiations with the United States, to serve as a warning.
Mark Mobius, former World Bank official and chief of Mobius Capital Partners indicated that the trade war was not likely to end in the near future. ‘If there are negotiations between the United States and China, it is possible that China will adopt a very aggressive stance. The mainland will not back out easily. After all, it’s a matter of a trade profit worth $300 billion. The country will not let it go so easily,’ warned Mobius.
‘After six months into the trade war, there is a possibility of both countries coming forward to work out a compromise. The trade war could end thereafter. However, in the meantime the gory effects of the trade war will be seen on the global economy,’ warned the US economist. The warning by Mobius is noteworthy.
The United States has imposed tariffs on Chinese imports worth $250 billion. In retaliation, China imposed tariffs on US imports worth $50 billion and has threatened to tax an additional $60 billion worth of goods. US President Trump has threatened to impose tariffs on the entire range of Chinese imports worth $500 billion and warned the country that the United States had nothing to lose.
President Trump has succeeded in signing a new tripartite agreement with Mexico and Canada. He did so by including a condition of banning the two countries from signing a trade agreement with China. The Trump administration has thus, managed to corner China. At the same time, Trump has signed a fresh trade agreement with South Korea while negotiations with Japan are also underway. In view of the success that he has had in signing these two trade agreements, indications from the analysts and sources are that President Trump would adopt a more aggressive stance against China.
The Chinese economy is said to already be under stress because of the tariffs imposed by the United States so far, and the new actions by President Trump will render a considerable blow to it. The warning issued by Mobius regarding the gory effects of the trade war therefore becomes significant.
Only last month, British Economist Professor Francesco Moscone had issued a serious warning stating that the US-China trade war will culminate into a full-fledged war.