Tensions continue to rise between the US and CHINA and neither side is ready to make a deal. Trump said American tariffs on Chinese goods “could go up very, very substantially, very easily.” His comments came after trade talks between the two countries stalled earlier in May. Each side has since blamed the other, and Trump has threatened billions more in tariffs.

Tensions between Washington and Beijing have increasingly turned toward technology in recent weeks. “The technology war is not going to end,” Alastair Newton, director of Alavan Business Advisory and a former British diplomat, told CNBC’s “Squawk Box” on Wednesday. “Technology is where this battle is going to be fought out, even if we do get a trade deal on bilateral goods.” 

China has escalated its anti-U.S. discourse since the talks faltered and Trump blacklisted Huawei Technologies Co. and scores of its affiliates earlier this month in a bid to stymie its access to the U.S. market. His administration is considering restrictions on as many as five other Chinese tech companies.

Beijing has threatened to limit the supplies of magnets and motors that incorporate rare earth elements. This is a serious risk for US industry and would starve manufacturers of components in everything from cars to dishwashers and military equipment. Jack Lifton, co-founder of Technology Metals Research LLC, who has been involved with rare earths since 1962, said the impact on American industry could be devastating. “It would be a tremendous hit to the consumer appliance industry and the automotive industry. That means washing machines, vacuum cleaners, cars. The list is endless.”

In a speech to the Calgary Chamber of Commerce, senior deputy governor with the Bank of Canada, Carolyn Wilkins, said that “China and the United States have escalated their dispute, and Canada has been caught in the crossfire.” She continued to say that international conditions, pose a threat to the potential rebound for Canada’s economy.

Experts are hopeful that a deal may be reached in the next six months. “I would be looking at the G-20 as a natural venue for the presidents to agree to resume negotiations, and maybe walk back tensions a little bit, but not as a place for an actual agreement,” J.P. Morgan’s Global Market Strategist, Hannah Anderson, told CNBC.

Source: Financial Post
Source: CNBC
Source: Financial Post
Source: Financial Post