China trade deal is really 'the fight for global dominance'

President Trump on Sunday threatened new tariffs on imported goods from China, infusing fear into the markets over whether trade talks – thought to be near completion – will fall apart.

“This is a bit of a hiccup,” Sandip Bhagat, CIO of investment firm Whittier Trust CIO, told Yahoo Finance’s The First Trade. "We seem this close but that resolution on the global trade war just remains elusive."

China's Xi Jinping is still scheduled to send top negotiators to Washington on Wednesday – but officials there are also warning the country could walk away. (According to Bloomberg reports, U.S. Trade Representative Robert Lighthizer was disappointed with trade discussions last week; Chinese officials told their U.S. counterparts they would not agree to a deal that required changes to Chinese law, even though previously China had agreed to change its laws in the text of the deal.)

“I think for the most part investors had put this trade negotiation deal away and were looking forward, and I do think that was a setback and largely because of the communication from the White House that was a 180,” Jack Ablin, founding partner and CIO at Cresset Capital, said on Yahoo Finance’s YFi AM.

A nuanced trade deal

But this trade deal isn’t just about products and goods.

“This trade deal is really more nuanced,” Ablin said. “It's really the fight for global dominance in technology and trade.”

The president, who refers to himself as “tariff man,” seeks the upper hand and credits his tariffs on Chinese goods for some of the robust growth the U.S. economy has had.

“China doesn’t want to appear to be submissive,” said Bhagat. "Maybe this pushes the end of the saga a little further back, but it doesn't alter the endgame. No one wins in a trade war, and to fully engage in one would be incredibly foolish.“

Bhagat said fears of a recession have receded and the economy is generally in a good place, adding that any dip today is a buying opportunity.

Read more:

Warren Buffett is unfazed by news of deteriorating US-China trade talks

Trump is losing his trade war with China

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