U.S. and China need a trade deal before both of their economies are badly weakened, according to former Undersecretary for Economic Growth Bob Hormats.
“The trust has really been badly eroded… We’re on a course toward mutually assured disruption, disruption of our economy, disruption of the Chinese economy, and big American companies are going to be hit with big supply chain relationships with China,” he told FOX Business’ Liz Claman on “The Claman Countdown.”
China announced on Monday that it will sue the U.S. using the WTO over America's latest round of tariffs. Last weekend, the Trump administration put a 15 percent tariff on roughly $112 billion of Chinese goods.
Hormats argues that China’s response to the recent tariffs shows they want to negotiate with the U.S.
“China has been relatively restrained in its response to the tariffs that the United States put on over the weekend, which indicates that they would like to sit down at the negotiating table again,” he said.
Researchers from Deutsche Bank suggested that China has shifted its strategy from a focus on “resolution to one of endurance.”
“If they can’t reach an agreement on these issues in the relatively near future, this could last for a very long time,” Hormats said.