Financial markets strongly value the possibility of a trade agreement between the United States and China. Such a situation would make it possible to reduce the constraints on global trade and to order them according to the framework defined by the agreement. Nothing would then stand in the way of the return of larger trade flows likely to bring global growth once again.
This idea is attractive because it would leave the area of concern that marks the global economy since last fall and for which we do not spontaneously see a way out.
Yet this possibility of an agreement seems to me to be totally illusory. Tensions between the US and China mainly reflect a problem of technological leadership. Which of these two countries will set the standard for developments like 5G or artificial intelligence or other technologies. Both countries are in fierce competition. I can’t imagine an agreement in which one of the two countries would agree to be subject to the developments of the other. Tensions between the two countries will remain strong even if minor agreements could be signed.
This will generate tension and volatility in the overall dynamics.
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