Deadlock between China and the US reveals conflict of priorities

Last Wednesday (13), United States President Donald Trump visited Beijing to meet with Chinese leader Xi Jinping after months of tension involving tariffs, international trade and strategic disputes between the two powers.

Despite the attempt to signal a diplomatic rapprochement, the meeting showed differences between the priorities of each side.

According to Marilia Fontes, presenter of Resenha do Dinheiro, Trump arrived in China with a greater focus on trade and economic agreements, while the Chinese government sought to reinforce political and strategic issues, especially related to Taiwan.

During the speech, Xi Jinping mentioned the fear that the two powers would end up entering the so-called "Thucydides Trap".

"The concept describes moments when an emerging power threatens the leadership of an established power, increasing the risk of conflict between them", explains Fontes.

For Thiago Godoy, the current scenario goes beyond the traditional economy and involves strategic sectors of the new global order.

"This dispute involves sectors such as semiconductors and technology. Furthermore, China seeks to reduce global dependence on the dollar, in a scenario of reorganization of the world economy", he states.

Bernardo Pascowitch highlights that there was market expectation regarding possible advances in negotiations between the two countries.

"Trump hoped to publicize agreements that ended up not coming, whether on trade, tariffs or even issues related to oil and the Strait of Hormuz", analyzes Pascowitch.

The impasse over Taiwan also plays a strategic role in the global economy as it concentrates some of the world's largest semiconductor manufacturers, essential components for cell phones, computers, artificial intelligence, electric cars and military equipment.

Therefore, a possible escalation of tension in the region could have consequences for the technology and investment sectors.

"When we look at the S&P at its highest levels and the market is very concentrated in the American stock market, this increases the perception of risk. If Taiwan is annexed and the USA does not react more strongly, this could increase investors' lack of interest in American assets and lead part of the market to look for opportunities in other regions", concludes the presenter.

Dinheiro Review
Carried out with the support of B3 and the investment manager BlackRock, the program is presented by Thiago Godoy, the "Financial Daddy", Marilia Fontes, founding partner of Nord Investimentos; Bernardo Pascowitch, founder and CEO of Yubb, proposes a light, direct and uncomplicated approach to topics related to financial education and investments. The attraction addresses the main themes of the economy weekly with the informality of a conversation between friends - without compromising on analysis.

The Money Review airs every Friday, at 7pm, on the CNN Money YouTube channel and on Sundays, at 3pm, on CNN Brasil.

Source: CNN