- 26th July 2019
- Posted by: Hakeem
- Categories: Innovation, Technology, TRADE
- Markets will calm once the U.S. and China reach a temporary trade deal, but the “cold tech war” will carry on, according to Chi Lo, senior economist at BNP Paribas.
- American trade negotiators will soon head to China for face-to-face talks as the world’s two largest economies try to strike a deal, sources told CNBC.
- The future of 5G may mean that there are two streams, one led by China and one led by the U.S., according to Lo.
That will eventually fade once the two countries reach a provisional deal, according to a BNP Paribas economist, but they’ll leave behind a “cold tech war.”
American trade negotiators will soon head to China for face-to-face talks as the world’s two largest economies try to strike a deal,sources told CNBC.
“We’re likely to get a temporary agreement in the coming months,” said Chi Lo, senior economist at BNP Paribas. He told CNBC’s “Street Signs” on Friday that if Beijing and Washington can agree to a temporary deal then they can “set the stage for longer-term negotiation on more deep-rooted issues.”
Lo said, given his expectation of a temporary pact, the continued trade war will no longer have such a big impact on “the macro risk in terms of market volatility,” in the coming months.
But the affect of the trade dispute will linger on and hurt tech, Lo said. He predicted that disagreements in the technology sector will probably get even “colder” in the coming months — or even coming years.
“There will be more focused trade war risk on the tech sector going forward. But then the overall market sensitivity to overall trade war risk may fade a bit,” said the economist.
On Wednesday, Trump’s new defense secretary said the U.S. trade war with China is as much about national security as it is about the economy.
“I’ve been studying China for quite some time now and I’m big on China as well,” Secretary of Defense Mark Esper told a group of reporters at the Pentagon when he was asked about the escalating conflict between Washington and Beijing.