Global Strategy: American bull in a China shop - trade war scenarios

The Trump administration wants to remake the US by reshaping the world. This requires a deep correction in global savings and investment imbalances, focusing on China.  We explore five different trade war scenarios, ranging from negotiations to full escalation to bifurcation: in short, the harder the US pushes, the bigger the impact on China’s surpluses.  While that suggests trade wars ‘work’, they come at a rising cost as they get ‘hotter’.  Nonetheless, from an economic statecraft perspective, this still implies the risks of outcomes that markets do not yet fully price for.