Global Macro Service > Research Briefings > China

Trade tensions with US decline, but broader issues linger

​The joint US-China statement of May 19 shows that increased communication between the two on trade, investment and technology policies in recent weeks has reduced trade tension. However, while constructive in tone, the statement was very short and general. Also, it did not refer to China’s industrial policy, which is highly controversial in the US, thus leaving much of the broader tension between the two countries unresolved.

In all, recent developments validate our outlook. We expect tariff imposition, and thus short-term economic impact, to be relatively contained. But broader economic tension and rivalry between the US and China is on the rise, with serious long-term implications, especially in the area of technology.

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