Yahoo Finance UBS CEO: US-China trade wars 'likely to go worse before they get better'
The CEO of UBS said he believes that trade tensions between the US and China are likely to escalate in the short-term.
“Although in the last few days we have signs that there is an increased willingness to resolve the outstanding tensions, my own view is things are likely to go worse before they get better,” Sergio Ermotti said at UBS’ European conference in London on Tuesday.
Earlier this year, US president Donald Trump hit some Chinese imports with tariffs, beginning a tit-for-tat trade war between the two countries. The US currently has 10% levies on $200bn-worth of Chinese goods and has threatened to slap all imports — worth over $500bn — with a similar tariff. China has imposed similar tariffs on US goods.
Trump and Chinese premier Xi Jinping are due to meet at the G20 summit in Argentina later this month and there are hopes that the two sides could bury the hatchet. However, Ermotti was not optimistic.
“The issue that has most affected sentiment over the last few months are clearly the trade tensions between China and the US,” the UBS CEO told the audience on Tuesday.
“I’m convinced that in the long run free trade is a stronger force for good than protectionism but clearly the ongoing uncertainties and measures taken have already had an impact on future growth prospects.”
However, Ermotti was more optimistic about Asian and global growth prospects over the longer term. He said: “At the end, this will not take away the long-term secular trends that support China economic development, urbanisation, and wealth creation.
“Asia and China are a growth story for the next decade but almost certainly it will not be a straight line like we saw in the last decade.”
