China Ambassador Warns Of “Dire Consequences” If No Deal, Hints At “All Out” War

Tuesday, November 27, 2018
By Paul Martin

by Tyler Durden
ZeroHedge.com
Tue, 11/27/2018

Earlier today, Trump’s chief economic advisor Larry Kudlow poured cold water on expectations for an imminent resolution of the US-China trade war when he said that negotiations in the run up to this week’s G-20 talks “haven’t yielded any progress”, and unless something changes, the “administration will move ahead with the next phase of tariffs.”

“Things have been moving very slowly between the two countries,” Kudlow said, adding that it was up to Xi to come up with new ideas to break the deadlock. And, echoing a report from the US Trade Representative published earlier this month, Kudlow said there hasn’t been much of a change in China’s approach. “We can’t find much change in their approach,” Kudlow told reporters. “President Xi may have a lot more to say in the bilateral [with Mr Trump], I hope he does by the way, I think we all hope he does…but at the moment, we don‘t see it.”

Just a few hours later, a report by Reuters confirmed that Kudlow won’t be “seeing it” for a long time, because according to China’s ambassador to the US, Cui Tiankai, China is going to this week’s G-20 summit hoping for a deal to ease a damaging trade war with the United States, even as he warned of “dire consequences” if U.S. hardliners – read the trade hawks led by Peter Navarro – try to separate the world’s two largest economies.

Asked whether he though hardliners in the White House were seeking to separate the closely linked U.S. and Chinese economies, Cui said he did not think it was possible or helpful to do so, but warned that “I don’t know if people really realize the possible consequences – the impact, the negative impact – if there is such a decoupling.”

He followed up the surprisingly strong statement with an even more shocking comment, in which Tiankai went so far as to tacitly hint that the “lessons of history” suggest that if there is no deal, what comes next could be another great depression… and conventional war.

“The lessons of history are still there. In the last century, we had two world wars, And in between them, the Great Depression. I don’t think anybody should really try to have a repetition of history. These things should never happen again, so people have to act in a responsible way.”

Still, the Chinese ambassador toned it down a bit in his next commenting: when asked whether he thought the current tensions, which have seen the two sides impose hundreds of billions of dollars of tit-for-tat tariffs on each other, could degenerate into all-out conflict, Cui called the outcome “unimaginable” and that the two countries should do everything to prevent it.

Note: he did not rule “all-out conflict” out.

The Rest…HERE

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