China: Measured response to US trade sanctions – TDS

According to analysts at TDS, China's response to U.S. trade sanctions has been careful and measured, suggesting the expectation for persistent tensions and the need to both minimize economic risk and preserve negotiating leverage.

Key Quotes

“China is likely cognizant that the recent ascendency of policy hawks in the Trump administration underscores the geo-strategic driver of economic tensions, complicating its ability to provide remedy.”

“Due to the contained Chinese response, markets have not been incentivized to price a high probability for further growth-negative developments. Considering the difficulty in addressing the economic and non-economic drivers of the U.S. position, trade tensions will be a slow-burning threat, now contingent on the next U.S. move.”