Stephen Olson discusses possible scenarios arising from trade war at Jefferies event

The flagship conference witnessed the participation of over 170 companies and more than 600 institutional investors. Stephen Olson spoke on the session, titled “US-China Trade War: Possible scenarios and other implications”, which examined the possible scenarios of the trade war, import substitutions, moving out of manufacturers from China and all other implications arising from the tariff war.

An hour-long session was moderated by Jefferies Chief Global Strategist Sean Darby. During the event, Olson outlined 5 possible scenarios for the US and China moving forward.

1. Decoupling: A scenario where import exports decline, FDI in both directions drops off, supply chain linkages weakens, tech transfers and joint R&D reduces.
2. Cease fire, followed by agreement: According to Olson, this scenario involves a stand down agreement, and commencement of long term negotiations on core issues.
3. Quick deal: In this plot the two countries will enter a cosmetic agreement of vague commitments on some policies and increase purchase of US goods, said Olson.
4. Protracted trench warfare: In this outline, Olson opines that the current tension between the two countries will remain high, but businesses will adjust to the new normal.
5. Trade system unravels: A doomsday scenario where US-China trade dispute escalates, pushing an already weakened WTO off the edge of the cliff.

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