Loading ...Dr.Doom Warns Of Imminent Sino-American Bust-Up After G-20
As matters stand, the probability of a deal eventually being reached is low (my colleagues and I put it at just 25%
Moreover, Xi is not an absolute ruler. While he controls most of the levers of power, there are still factions within the Communist Party of China (CPC) that could turn on him if he does not mount a sufficiently aggressive response to the US. He is not in a position to accept a deal in which he – or China – loses face or power
The danger is that Trump, too, would prefer a partial or full-scale trade and technology war to a weak deal. If Trump makes any notable concessions, he will be accused by both Democrats and right-wing pundits of appeasing China and betraying American blue-collar workers. Even if he can’t secure a favorable deal, at least he can say he remained tough. Among those who have Trump’s ear are national-security hawks – some of them modern-day Dr. Strangeloves – who believe that China is so fragile that an economic shock could precipitate a political collapse, and even regime change. This is a dangerous game to play, because it could lead to actions that turn a cold war into a hot war. The mere presence of such extreme voices in Trump’s orbit suggests that the administration’s intent is to contain China at any cost
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Where does that leave us? If both Xi and Trump find the third scenario attractive, neither will be willing to meet halfway on a deal. That makes the second scenario – a full-scale trade and technology war – the most likely outcome, given that a controlled escalation is inherently unstable.
As matters stand, the probability of a deal eventually being reached is low (my colleagues and I put it at just 25%).
https://www.zerohedge.com/news/2019-06-21/drdoom-warns-imminent-sino-american-bust-after-g-20