Stephen Olson discusses possible scenarios arising from trade war at Jefferies event
- Decoupling: A scenario where import exports decline, FDI in both directions drops off, supply chain linkages weakens, tech transfers and joint R&D reduces.
- Cease fire, followed by agreement: According to Olson, this scenario involves a stand down agreement, and commencement of long term negotiations on core issues.
- Quick deal: In this plot the two countries will enter a cosmetic agreement of vague commitments on some policies and increase purchase of US goods, said Olson.
- Protracted trench warfare: In this outline, Olson opines that the current tension between the two countries will remain high, but businesses will adjust to the new normal.
- Trade system unravels: A doomsday scenario where US-China trade dispute escalates, pushing an already weakened WTO off the edge of the cliff.