With US-China trade negotiations taking a sharp and unexpected turn for the worse over the last month, followed by President Trump’s surprising recent threat to impose tariffs on Mexico, trade wars are (once again) Top of Mind.
In this episode of the Top of Mind at Goldman Sachs podcast, Allison Nathan from Goldman Sachs Research speaks with the Hudson Institute’s Michael Pillsbury, who is closely aligned with the Trump Administration on his views towards China, as well as Dr. Wang Huiyao, founder of Beijing-based think-tank, the Center for China and Globalization, to assess where the current impasse goes from here.
Our takeaway after hearing from both sides: although U-turns in the talks seem to be the norm, a US-China deal is unlikely anytime soon. Indeed, Susan Shirk, professor at UC San Diego, provides insight on how policy choices and personal styles have led to the elevated tensions we have today, which aren’t easily unwound. With growth worries already mounting, we assess what escalating tensions on multiple trade fronts could mean for growth, inflation and the markets, which look manageable for now.