Oxford Economics

 

Trump has confirmed the US will impose 104% tariffs on some Chinese goods

Louise Loo, a lead economist at the Oxford Economics company, has told the BBC that "retaliation and counter-retaliation from the Chinese are almost a given at this stage".

The Singapore-based economist says China's retaliatory measures are likely to be proportionate, and suggests that Beijing is "leaving the door open to trade talks".

"We think between Trump, Xi, and... Powell [Jerome Powell, Chair of the Federal Reserve of the United States], Trump will likely blink first," she adds.

"The worst case scenario - if bilateral trade flows completely disappear between the two - would cost China 3% of GDP," Ms Loo adds. "It might not have the fiscal means to completely offset that this year, but the longer term trend is that China’s trade has continued to penetrate into other emerging markets, which will mitigate that fallout."

This "worst case scenario" seen by experts as being unlikely at this stage.