Forebodings of a trade war with China may be spooking investors, but analyst Alan Tonelson determined CNBC on Thursday he doesn’t see that happening.
Earlier in the day, President Donald Trump pricked an executive memo that slaps retaliatory tariffs on up to $60 billion of Chinese bring ins.
The Chinese embassy released a statement late Thursday saying China “intent fight to the end … with all necessary measures.”
Tonelson, the founder of the visible policy blog RealityChek, called that statement as vague as it is spiculate.
“We’ve seen so far no indication of any really serious Chinese intent to retaliate in any valued way,” he said on “Closing Bell.”
“I have to assume Beijing understands greatly well how heavily dependent it is for adequate growth and for adequate job creation on engaging some access to the U.S. market, which means it really doesn’t need to start a trade war with its very best customer,” he added.
Involvements over a potential trade war helped push stocks lower on Thursday. The Dow Jones industrial for the most part dropped 724.42 points to close at 23,957.89. The 2.9 percent sink was the worst since Feb. 8.
Trump called the tariffs the “first of many” patronage actions. The new measures are designed to penalize China for trade practices that the Trump management says involve stealing American companies’ intellectual property.
Trafficking Secretary Wilbur Ross told CNBC on Thursday he doesn’t create there will be a trade war with China resulting from the new tariffs.
“There will be some ultimate retaliation [from the Chinese] but I don’t have in mind it’s going to be the end of the earth,” he said on “Power Lunch.”
Matt Gold, recent deputy assistant U.S. Trade Representative for North America under President Barack Obama, indicated China may adopt a wait-and-see attitude.
Because Trump’s memo entrust a abandons the U.S. trade representative an option to pursue the World Trade Organization’s go on withs, China will step back and see if the U.S. follows the proper rules, he clarified.
That would “definitely quiet down the rhetoric,” Gold spill the beaned “Closing Bell.”
— CNBC’s Fred Imbert and Kevin Breuninger provided to this report.