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China-US trade tension will not end up in war: Warren Buffett

Billionaire American investor Warren Buffett and the CEO of Berkshire Hathaway Inc is seen on a screen at the company's annual meeting in Omaha, Nebraska, May 5, 2018. (Photo by Reuters)

Billionaire American investor Warren Buffett  says it is not likely that the United States and China will be at loggerheads over an escalated trade issue that has unnerved financial markets for weeks.

Warren, an investor in both America and China, said it is inevitable for Washington and Beijing—two dominant economic players in the world—to have tensions sometimes, but argued that they two are intelligent enough to avoid doing “something extremely foolish.”

“The United States and China are going to be the two super-powers of the world, economically and in other ways, for a long, long, long time,” Buffett said at Berkshire Hathaway Inc’s (BRKa.N) annual shareholders’ meeting in Nebraska on Saturday.

“It is just too big and too obvious for that the benefits are huge and the world is dependent on it in a major way for its progress that two intelligent countries will do something extremely foolish,” he added.

“We both (US and China) may do things that are mildly foolish from time to time. There is some give and take,” said the 87year-old investor.

US President Donald Trump triggered a trade dispute in April when announced a tariff on Chinese steel and aluminum and, in turn, China responded with tariffs on American products. It's escalated to at least $50 billion dollars in tariffs for each country.

In an attempt to resolve the dispute, a delegation from the US held talks with senior Chinese officials in Beijing on Thursday and Friday but the trade talk came to an end with no progress.

The Trump administration has presented a lengthy list of demands to Beijing before the start of talks.

Citing people familiar with the talks, Reuters said the American delegation demanded that China lower tariffs to levels no higher than those imposed by the United States.

China, in turn, has asked that Washington ease crushing sanctions on Chinese telecom equipment maker ZTE Corp, according to sources.

Trump has so far showed no indication to back off on his threat to impose tariffs on up to $150 billion in Chinese goods, saying he was determined to bring fairness to US-China trade.


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