PGIM Fixed Income sees four ways trade talks might proceed and weighs the probability of each scenario.
President Trump and President Xi are talking again and, for the time being, the trade war is not on an escalating trajectory. The deeper question is, how much closer are we to a final resolution?
In a new paper, “The Next Chapter in the U.S. – China Trade War ,” Nathan Sheets, PGIM Fixed Income’s chief economist and head of global macroeconomic research, details the compelling incentives both leaders face to resolve the conflict. He outlines four scenarios as to how the trade talks might proceed over the next year—one of which he believes is far less likely than the others:
- Smooth progress
- Rocky progress
- Trade tensions continue to bubble
- The negotiations collapse, and a full-blown trade war ensues
Which outcome is most likely, and which is the least? Learn more about each scenario and the estimated probabilities in “The Next Chapter in the U.S. – China Trade War .”
For a media interview with Nathan Sheets, a subject matter expert on U.S.-China trade relations, or to speak about global macroeconomic conditions, please contact Claire Currie.