J.P. Morgan: Rising tensions between US and China

J.P. Morgan: Rising tensions between US and China

May 18, 2020

Trade conflict
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US – China relations are back on a worrying path. Both countries have criticised the other’s approach to handling the coronavirus, and the US administration has now taken steps to stop the US federal retirement fund from shifting part of its asset allocation into Chinese equities.

Joe Biden, the presumptive Democratic nominee, has also highlighted his plans for strong action against China if his presidential campaign is successful. Recent survey data highlights that attitudes within the US electorate towards China have hardened this year, across both Republican and Democrat voters. China’s recent increase in US imports may help to hold the phase one trade deal together for now, but with the US election now less than six months away, tensions between the two superpowers look set to remain a potential source of market volatility in the near-term.

US voters have turned more negative towards China this year

% of US voters who have an unfavourable opinion of China

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Source: Pew Research Center, J.P. Morgan Asset Management. Data collected from 3-29 March 2020.

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