Retaliation or escalation? Trust between the U.S. and China is fading fast, analysts say

KEY POINTS

“The root cause of the tension is due to a lack of mutual trust,” Larry Hu, chief China economist at Macquarie, said in a note Monday.

Hu and other analysts describe the announcements of the last few days as a “misperception” on both sides.

“On the specific episode the market is focused on, the two sides may still return to the table to find a short-term fix. However, it won’t be a lasting solution,” said Jianwei Xu, senior economist for Greater China at Natixis.