Jacob Frenkel, Chairman for J.P. Morgan International, expressed his fears regarding the trade war that is set to take place between the United States and China is the biggest threat to the security of the world economy that now exists. Frenkel made the comments regarding the increasing tensions mounting between the two countries regarding tariffs to Steve Sedgwick of CNBC.
Frenkel says that so far what is taking place does not constitute a trade war but a couple of skirmishes has taken place and continues to take place.
The conflict between the two nations began with United States President Donald Trump announcing widespread tariffs to be placed aluminum and steel products imported from China. The back and forth continued on Wednesday when Beijing tariffs on exports from the United States that would amount to $50 billion worth of fees per year.
The high-stakes poker game progressed on Thursday when Trump announced that he had advised trade representatives for the United States to impose an additional $100 billion worth of tariffs on Chinese goods.
Frenkel gives a stern warning to both nations saying that the world is much too interdependent for the two largest world economies to make concerted efforts to undermine each other.
Frenkel also observed that the Chinese will be willing participants if negotiations were to take place but all discussions will need to be respectful for Beijing to come to the table. He went on to say that the Chinese are very rational people and would do what is in the best interest of all if negotiations are genuine.