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The U.S.-China trade war is getting “considerably worse” and comments at the United Nations General Assembly suggest no end in sight, according to Ian Bremmer, the New York-based president of Eurasia Group.
Chinese officials will be patient, hoping to maintain the status quo while making no serious attempts at a breakthrough deal until after the 2020 U.S. election, Bremmer wrote in an email summarizing his UN meetings. He said China’s Foreign Minister Wang Yi’s combative tone suggests a much deeper divide between the world’s two largest economies than six months ago.
“The two sides are digging in and it’s gotten considerably worse in the past weeks,” Bremmer said.
On Friday, Wang hit back at President Donald Trump’s trade policies, warning that protectionism could plunge the world into a recession just as negotiators from both countries prepare to meet in Washington next month. The Trump administration played down a Bloomberg report the same day that the White House was weighing limits on U.S. portfolio flows into China.
Here are some of Bremmer’s other key takeaways from UN week:
A top White House adviser said Trump wants to reduce trade tensions with the Europeans because “it’s going to get tougher with China”Meantime, there will be a stronger push to complete bilateral deals with Japan (which is close) and India (just getting started)Risk of U.S. escalation with Iran following recent attacks on Saudi Arabia’s oil export capabilities was “definitively put to bed”Expect more volatile behavior from Turkish President Recep Tayyip Erdogan, who is “sliding Toward the end of his rule”There’s “palpable frustration” from the Trump administration on Venezuela, although some signs that Cubans (facing pressure from U.S. sanctions) will return to political negotiationsThe “alliance for multilateralism,” a gathering led by the German and French governments, is the broadest effort yet to counterbalance the growing schism between the U.S. and ChinaTrump impeachment proceedings will occupy virtually all of the U.S. political coverage for the rest of 2019, yet there’s “virtually no chance” it gets Republican support in the SenateImpeachment will probably increase voter turnout, a negative for TrumpProceedings will also hurt former Vice President Joe Biden’s candidacy and benefit Senator Elizabeth WarrenIncreasing odds of U.S. constitutional crisis with tinges of Watergate and Bush/Gore 2000
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