The U.S. and China are in the early innings of a trade war, and prominent economist Stephen Roach says it’s the United States that’s on track to lose.
“Trade wars are not easy to win. They’re easy to lose, and the U.S. is on track to lose this trade war,” Roach, a senior fellow at Yale University and former Morgan Stanley Asia chair, told CNBC’s “Squawk Box” on Thursday.
“This is live ammunition. This is not just rhetorical discussion any more,” he said. “We’re in the early stages of fighting skirmishes in a real, live trade war. The question is, how far does it go? And how significant will the ammunition be in the future?”
President Donald Trump’s administration late on Tuesday released its list of $200 billion worth of Chinese goods that it said it aims to subject to 10 percent tariffs following a review process. China threatened retaliatory action and pledged that it would lodge a complaint with the World Trade Organization.
Last week, U.S. tariffs on $34 billion in Chinese products went into effect. China responded by slapping 25 percent duties on the same amount in U.S. goods.