It is impossible to exaggerate what a dangerous cliff the U.S. and China are perched on today.
If the current trade dispute tips over into a full-blown economic war the world as we’ve known it for the last four decades is going to be replaced with something much uglier, less prosperous, less stable and less able to meet global challenges, like climate change and cybercrime, that are barreling down on us.
This has become a really bad play. We have a juvenile, unstable U.S. president actually enacting trade policy via Twitter and we have a pressured Chinese president who is afraid to appear to be kowtowing to any trade demands from the U.S. for fear that his domestic rivals will denounce him as weak and that pro-democracy demonstrators in Hong Kong will be emboldened by his weakness.
So each man is trying to intimidate the other into submission by showing who has the biggest tariff, and this is whipsawing markets and making it impossible for investors to plan long term.
We need a cease-fire now – and if no one else is going to propose the terms, I will.