US-China tensions could turn into war of attrition

US-China trade wars have been re-invigorated with extra tariffs on Chinese products worth $200bn and threats of 25% tariff on a further $300bn. This prompted comments from President Xi Jinping, calling on the nation to embark on a new 'Long March'.

This indicates the inclination of the Chinese government to embark on a protracted trade war and prepare the country for adverse conditions arising from this. Given the rhetoric from both leaders, the initial salvoes could quite quickly become a war of attrition, which harms the global economy, not only through reduction in global growth, but also through polarisation between exporting and importing nations, specifically those exporting to the US.  Notwithstanding other local geopolitical risks, the US has been the leader in terms of economic growth, with lower unemployment and inflation...