Trade negotiations collapsed between the US and China. It appears that the trade war that was started by the Trump administration may not be ending soon. Failure to reach an agreement will have a negative impact on the stock market. Investors become nervous at the prospect of uncertainty. The US public may also see increasing prices on goods from China. The retaliation from China has been to go after the agricultural sector. This could harm the base that elected Donald Trump to office. Farmers have felt the effects of trade war, however the Trump administration has sought to counter this. China is the world's second largest economy and trying to have a trade war would be deleterious to America's economic health. President Donald Trump has constantly blamed China for some of America's economic challenges during the 2016 election and has continued to show open hostility. If a trade war continues it may evolve into some form of economic warfare. Disputes over intellectual property theft and tariffs must be addressed by the two nations. President Xi Jingping has expressed that China will not accept any agreement that undermines China's economic interest.Economic competition can also influence relations between other Asian nations. North Korea may be used to harass China, which has substantial investments in that country. Attempts at diplomacy have failed and in an indirect way are related to the US-China trade war. The United States may get more aggressive with North Korea as a means to harass China. The total estimate of US tariffs on Chinese imports is $200 billion. The measure will soon go into effect and there is a level of uncertainty how drastically this will effect global markets.
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