icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm

Economic cold war may be coming, JPMorgan warns

Economic cold war may be coming, JPMorgan warns
Tit-for-tat tariffs between the world’s two largest economies, China and the United States, may be the beginning of a prolonged economic conflict, analysts say, adding that each of the two countries pursues its own development.

Tariffs will hit China's gross domestic product growth by 0.6 percentage points, according to a JPMorgan report cited by CNBC. It explains that such a slowdown would add to existing negative pressure on the economy due to Beijing's efforts to reduce reliance on debt, and transition towards consumption-driven growth.

“It won't be easy,” said Jing Ulrich, managing director and vice chairman of Asia Pacific at JP Morgan Chase. “The road will be bumpy.”

Ulrich who was talking during a panel discussion at the World Economic Forum conference in Tianjin said that “Now we need to think about whether this current trade war will turn into an economic cold war.”

“We hope it doesn't,” she said, raising hopes that there is still a chance that some sort of reconciliation may be reached. “We all know if the trade war goes on, it is going to be a lose-lose situation. No one in the world will be benefiting.”

The expert stressed that Beijing will not change its domestic policy because of external pressure.

“The problem is in the technological sphere [where both] China and the US want to lead. China, of course, is already a trailblazer in many areas,” said Ulrich.

The latest round of tariffs on $200 billion worth of Chinese imports to the US will initially take effect from September 24 at a 10 percent rate, before rising to 25 percent on January 1. The tariffs will be applied to more than 1,000 Chinese products, including consumer goods like electronics, bicycles, tires, and furniture.

Beijing is planning counter-tariffs on $60 billion worth of US imports at 10 percent and 5 percent.

US President Donald Trump has repeatedly criticized Chinese trade practices, calling them unfair. He has also accused Chinese corporations of stealing US technology and intellectual property. So far, Washington has imposed tariffs on $50 billion worth of Chinese products.

For more stories on economy & finance visit RT's business section

Dear readers and commenters,

We have implemented a new engine for our comment section. We hope the transition goes smoothly for all of you. Unfortunately, the comments made before the change have been lost due to a technical problem. We are working on restoring them, and hoping to see you fill up the comment section with new ones. You should still be able to log in to comment using your social-media profiles, but if you signed up under an RT profile before, you are invited to create a new profile with the new commenting system.

Sorry for the inconvenience, and looking forward to your future comments,

RT Team.