Commentary by JP Morgan Asset Management's global market strategist, Kerry Craig
Craig argues that the US doesn't produce enough to meet consumer demand and "that doesn't change if they're putting tariffs on goods from other countries".
Adding that the US tariff list announced here is no surprise since it is targeting goods China wants to make important in their economy - without impacting US consumers.
He also says that tensions between the two countries is likely to linger for another 6-8 weeks before the list is finalised, while also saying that China will respond in order to "maintain their presence and strength" though the approach taken will be more measured.
Although tensions are set to escalate, Craig believes that a trade war is unlikely to materialise and that the US won't turn to pick a fight against the EU - saying that China "is easier to pick a fight against from a political standpoint because it's very different".
