In a memo published on Wednesday, American lending giant JP Morgan & Chase stated that while there remains a high degree of uncertainty regarding future developments in the trade war between China and the United States, the baseline remains that the tariffs imposed by Trump on China are likely to escalate significantly.
JP Morgan believes that its baseline projections indicate that the United States will raise tariffs on its imports of Chinese goods to 60%, suggesting expectations for further escalation in the ongoing trade conflict between the world's two largest economies.
In its latest assessment, JP Morgan noted that while it continues to expect intensification of tariff measures, the outlook remains cloudy due to significant uncertainty. However, JP Morgan pointed out that the main unknown remains the timing, pace, and magnitude of any future increases in tariffs, rather than the possibility of escalation.
The bank's economists believe that geopolitical tensions, domestic political developments in both countries, and the broader global economic landscape will all play crucial roles in shaping the next phase of the tariff dispute.
Despite forecasts for additional measures, JP Morgan warned that the path forward remains largely unpredictable, with potential shifts dependent on diplomatic negotiations and changing economic policy priorities on both sides.
