China Trade War Fears Still Running High

As perceived risk of NAFTA withdrawal has subsided, Sino-American trade war continues to rattle online observers.

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Predata's U.S.-China trade volatility index remains elevated, whereas the NAFTA Cancellation Risk Index is relatively muted.

Over the weekend, Trump Administration officials sought to play down the escalating tit-for-tat with China over trade. The latest salvo had come April 5, when the White House announced it would target up to $100 billion in Chinese goods for new tariffs. Beijing quickly said it would retaliate in kind.

Though Trump and his allies repeated Sunday that China would balk at implementing retaliatory tariffs, a Predata U.S.-China trade volatility index suggests online audiences remain concerned. The index, which captures aggregate interest in a variety of Chinese- and English-language web pages related to the trade war, spiked ahead of Trump's decision on March 9 to impose tariffs on steel and aluminum. The signal spiked again on March 23 when Trump targeted another $60 billion in Chinese goods for duties. 

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Now, after a brief trough, the index is again elevated, suggesting observers are continuing to fixate on the possibility of escalation. 

A primary driver of the index is Chinese-language interest in the White House's ascendant trade advisor and strident China hawk Peter Navarro. Attention to web pages on both Mr. Navarro and his 2011 book Death by China has risen ahead of each escalation in the trade dispute and is elevated now.

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Although fear over U.S.-China trade remains, the internet's expectations for NAFTA appear to be more positive. Predata's NAFTA Cancellation Risk Index has remained muted over the last month. The early March steel and aluminum tariff announcement triggered a rise, but online observers appear unconcerned that the Trump Administration will mirror its aggressive approach toward China and imperil NAFTA.

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