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US-China tariffs just the beginning of trade negotiations, JPM says



Liu He, China's Deputy Prime Minister, left, speaks to Robert Lighthizer, US Trade Representative, from the right and Steven Mnuchin, US Secretary of State, leaving the US Trade Representative's office after a Washington, DC meeting USA, Friday May 10, 2019.

Alex Edelman | Bloomberg | Getty Images

As cross-country relations shift over the next few decades, trading expects to remain a hot button issue, according to an analyst.

That prediction comes as the United States and China continue to square in a trade war that has roiled global markets. Last week, US President Donald Trump raised tariffs on billions of dollars of Chinese goods and China threatened to recover.

These developments ̵

1; which followed speculation that the world's two largest economies had been close to inking a trade deal – sent shockwaves through global markets. As countries, including China, remind more power globally, investors should expect more trading arguments in the future, according to James Sullivan, head of Asia ex Japan surveys at J.P. Morgan.

"When we start moving to a multipolar world, I think we have to admit that these trade calls aren't suitable and begin," said Sullivan on CNBC's "Squawk Box" on Monday. "I think we have to admit as a stock investor, in particular it is now the new normal."

"These trade talks are now part of the world market background for the next … 10-20 years because these countries and economies are developing their relative place in the world and how we rearrange the overall global structure to tell China's development, to account for a multipolar environment, "he said.

Last Friday, Washington raised tariffs from 10% to 25% on $ 200 billion Chinese goods. Beijing responded immediately after the deadline that it would take countermeasures against the move, but has not yet specified what they can mean.

However, the big markets all over the world turned out to shrugg it as stocks mostly advanced. [19659002] In an interview with Fox News on Sunday, Advisory Advisor White House, Larry Kudlow, said that US President Donald Trump and Chinese President Xi Jinping will probably meet at the forthcoming June G-20 Summit in Japan.

Kudlow said the chances of such a meeting "were pretty good" but he said there are no concrete definite plans for when US and Chinese negotiators will meet again.

The White House's financial adviser also told Fox News that China must agree that "very strong" enforcement rules for a possible agreement, pointing out that Beijing is reluctant to introduce legislative changes that had been agreed, reported Reuters.

For his part, Beijing commented in a comment on Mouth ay in the people's daily newspaper: "China will never lose its respect, and no one should expect China to swallow bitter fruit that damages its core interests." The publication is governed by the Chinese Communist Party.

– CNBC's Spencer Kimball and Reuters contributed to this report.


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