Investor Mark Mobius believes that until the world’s two largest economies China and the United States reach an agreement on trade, there will be much confrontation.
“(China is) going to be tough to begin with and they are not going to give in easily, because you’re talking about (a $)300 million trade deficit in China’s favor, so they are not going to give up that easily,” Mobius told CNBC on Tuesday.
He continued by saying that China and the U.S. may come to some sort of an agreement in six-months’ time, but “in the meantime, there will a lot of blood on the streets.”
Beijing and Washington have been locked in a tit-for-tat trade war for months, initiated by the Trump administration’s tariffs on products imported from China. The U.S. puts the blame for its trade deficit figures on China and has repeatedly imposed new levies on Chinese goods. Beijing has so far responded with retaliatory measures to each set of tariffs.
Despite efforts by trade negotiators on both sides, talks have so far failed.
Zeng Qinghong, chairman of Chinese auto firm GAC Group, believes that the trade war would adversely affect the global economy if it continues. He noted that his company has already suffered the consequences of the trade conflict.
“We originally planned to launch our ‘Trumpchi’ cars in the U.S. by the end of next year, but now with the introduction of the 25 percent additional tariffs, it has certainly had a pretty big impact on our plans,” Zeng said, speaking at the Paris Motor Show.
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