angle-left null China-US Trade Warcraft: An Investigative Analysis

China-US Trade Warcraft: An Investigative Analysis

White Paper Manager Insights Active Equity
March 2019
China-US Trade Warcraft: An Investigative Analysis

Authors and Contributors

Jack Encarnacao

Jack Encarnacao

Raphael J. Lewis

Raphael J. Lewis

Investors worldwide hang on every news story detailing the ups and downs of the increasingly tense relationship between the United States and China. While helpful, these updates typically note the ebb and flow of the tide, with little regard for the greater sea change that is fundamentally altering this crucial dynamic.

 In sum, we are witnessing the first act in a long, potentially ugly drama between one nation at the zenith of the world and another with the economic, demographic, geographic and intellectual weaponry to challenge and ultimately overtake its Western rival. 

This long-simmering clash will have important ramifications for public equities over the short-, medium- and long-term, as mega-cap multinational corporations (MNCs) and small-cap players alike are forced to realign supply relationships, sourcing agreements, partnerships and pricing to reckon with the emergent world order. 

We believe that, irrespective of any trade agreement hammered out by the leaders of the US and China in the near term, the trade war has exposed fundamental issues that must be understood by equity investors. The proverbial cow is out of the barn.