Jeffrey Viksjo, CFA
jeffrey.viksjo@ogorek.com

Jude Blanchette, Senior Advisor and China Practice Lead, Crumpton Group, makes the case that the “Trade War” with China is just the start of a longer-term global realignment, where super powers will battle for technological innovation amidst security concerns. He believes the markets are far too focused on a short-term easing of tariffs between the U.S. & China, and missing how far away China and the U.S. remain on solving longer-reaching structural issues (intellectual property transfer, etc.). As an example, he notes the recent escalations of tensions around the implementation of 5G technology, and the U.S. insistence that other nations do not use Chinese-firm Huawei to provide infrastructure out of security concerns.

If Blanchette is correct and an easing of tariffs will do little to thwart longer-term disagreements between the two countries, the markets may be overestimating the impact of a quick “trade resolution”.  If tensions persist beyond a ceremonial “deal” between the U.S. & China, we may be in for a longer-term impact to global growth than currently expected.

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