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US-China tension escalates as strategist claims China will win the trade war

Tensions have escalated immensely between these two superpowers since the trade war began. We have seen constant hostilities and retaliations, however, it is believed that China will eventually come out on top.

Independent Strategy’s president and global strategist, David Roche, thinks that China will win the trade war against the US and will ultimately be able to wean itself off American technologies completely.

Roche said: “China will never trust the United States again, and it will achieve its technology independence within seven years”.

Traditionally, China has been reliant on American suppliers for key technological parts such as chips, software, modems and even jet engines. However, recent setbacks for the two countries´ trade have strained these ties and impacted businesses on both sides.

In May, Chinese tech giant, Huawei, was placed on a US blacklist, restricting the firm from purchasing American-made chips and software unless they had permission to do so.

This spurred China to concentrate developments on their own tech sector, while also examining current Chinese tech companies to gauge the level of their exposure to American suppliers.

For example, China is developing its own chip industry. Under the government-led Made in China 2025 initiative, the country aims to produce 40% of its semiconductors by 2020, and 70% by 2025. Currently, only 16% of the semiconductors used in China are produced domestically.

Earlier this week, Peter Navarro, an adviser to the White House, called for everyone to be patient ahead of crucial US-China trade negotiations planned for next month between top officials in Washington.

“If we’re going to get a great result, we really have to let the process take its course,” Navarro said in an interview on CNBC.

For the past two years, President Donald Trump has been trying to come to an agreement with China to develop an amicable trade deal but to no avail. Recently, he imposed tariffs on China’s imports that affected global markets in order to gain some form of leverage in negotiations. This only pushed China into retaliating with their own tariffs for the US.

Intellectual property protection, the transfer of U.S. technology to Chinese firms and American companies’ access to China’s markets are all points of discussion in the talks, which are set to happen in October after lower-level discussions in mid-September.

“In the meantime, we need to be patient with the China negotiations,” Navarro told CNBC.