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China can ‘take a breath’ on trade war but Trump win risks escalation: economists

UBS economists have warned trade friction between China and the US could escalate if Donald Trump is reelected president in November, despite a truce to be signed by the two countries this week.

“That remains a risk, although we have phase one deal,” said UBS chief China economist and head of Asian economic research Tao Wang at UBS’ Greater China Conference on Tuesday.

She said conditions would become “more steady” after the deal, offering some certainty for businesses and governments. “We can take a breath here,” Ms Wang said in reference to China-US relations.

Donald Trump and Xi Jinping are due to sign off on the first phase of a trade deal this week.

Donald Trump and Xi Jinping are due to sign off on the first phase of a trade deal this week.Credit:AP

However, she conceded that for some companies there had been uncertainty and surveys of chief financial officers in China undertaken by UBS found some firms were moving out of the country.

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