The IMF has warned that the on-going threat of a trade conflict between the USA and China has the potential to hurt global growth. We have already seen that President Trump’s trade tariffs and the Chinese retaliations can hit confidence. In April the US placed a 25% tariff on 1,300 Chinese imported goods targeting about US$50bn of imports. This was countered by 106 US products being targeted with high Chinese import duties. These protectionist activities only diminish global trade and the impact is felt around the world not least in Europe.
It is thought that President Trump’s threats are intended to persuade China to level the playing field for US and other foreign businesses particularly in intellectual property rights and technology. A deal looks the most likely outcome.