Trump’s trade war has been a constant threat to the US economy over the past few months as the administration pushes against not just the Chinese, but our allies as well.  The series of tariffs being launched back and forth by the United States and China often lead to the stock market uncertainty.  While the uncertainty certainly exists within the US economy, the same cannot be said to the same regarding the Chinese economy.

Just last week, the US and China traded tariffs once again as more than $16 billion worth of goods from both countries received additional taxes.  The $16 billion adds to the $34 billion already imposed in July of this year. Tariffs could escalate further between the nations as some experts see the US placing tariffs on more than $200 billion worth of Chinese goods.

There is an argument that the additional tariffs on Chinese good could affect Asian markets in a variety of ways.  First off, they could cause a noticeable disruption to the supply chain within China and across all of Asia.  More than that, the latest manufacturing numbers show some slowdown in the number of orders coming through, which will likely to continue into the upcoming months.  Additional tariffs will likely amplify some of the effects.

Despite those factors, it is expected that China and Beijing will be making efforts to continue to cushion the impact.  According to Robin Xing, a chief China economist at Morgan Stanley, the Chinese government has been and will continue to, actively introduce measures which cushion the effects of the trade war on the Chinese economy.  In a statement to CNBC, he went on to say that, “we are not expecting any major growth correction because we think the potential impact from trade tariffs will be partially cushioned by the policy easing measures taken by the policymakers.”

Xing is also confident in many other factors that will serve to help alleviate the impact.  He acknowledges that the concern for their debt does exist, but thinks handling the debt will be much more attainable this time, as compared to 2008.  The debt and issues that arise from the trade war and tariffs will not be as massive as what was faced during the global financial crisis.  Furthermore, Xing does not think Beijing will participate in interest rate cuts, which in turn could increase the debt burden. Finally, CNBC also reports that an increase in spending of the government, as a result, to push and rebuild infrastructure, will soften the results of the current and any additional tariffs as well.

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