China expert: US-China tariff escalation risk

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00:00So Donald Trump started another day with a truth social post mocking China.

00:06Meanwhile, China's foreign ministry has accused the U.S. of economic bullying.

00:11Are the world's two largest economies heading into a tit-for-tat trade war?

00:16And how concerning is this rhetoric?

00:19I think it is pretty concerning.

00:20I think the challenge we have at the moment is both sides think the other one is in a weaker position.

00:25And that really does raise the risk of escalation.

00:27I think the U.S. thinks China has made a mistake in responding quite so forcefully and so quickly,

00:33and that China risks being a global outlier when other countries are trying to negotiate with the U.S.

00:37But I think from China's side, they think what the U.S. has done is an act of self-sabotage,

00:42and they think this is going to make China look like a more credible partner in comparison.

00:46And both of them are making their policies accordingly.

00:49And the second you add in the sort of domestic audiences that on both sides are expecting a strong response,

00:54I think in the immediate term, the off-ramps aren't that clear.