sarah mcgregor, who heads u.s. economic policy coverage in washington. thank you.et's take a look at the escalating trade tensions with the snp global ratings. joins us.wald it is pretty difficult for economists to really model the real economic impact going forward, given the kind of narrative can change from day to day. what is your best case scenario are rolled outs friday? it does not look like we will have any kind of last-minute negotiations to avoid that. >> good morning. i think the best case scenario for us is actually week move away from the trade wars and to a situation where the u.s. and china have essentially a renewed version of the strategic economic dialogue. we could put bilateral investment on the table. i really don't think the trade is a key issue. the u.s. trade imbalance with china reflects a lot of u.s. savings. if you look at china's surplus, it is less than 2% of gdp. it is unclear from all the stories we are reading what the ultimate objectives are of the u.s. do we want to reduce the bilateral trade deficit with china? do we want to reduc

sarah mcgregor, take you so much for that. trade war fears making the way to wall street.et's talk about more. that we are hearing president trump talk about the dollar and currencies, could this trade war change into a currency war? lives: i don't think so. think so.i don't liquidity was injected a few days ago. we were accused of starting a currency war. the currency is a byproduct of the excess liquidity that was put into the market to stable on -- bond defaults. it is very typical what a central bank does. the byproduct is the currency weakens. focus on what is a declining economy, and maybe something of a dire straits for liquidity issues in china with a tariff situation adding to it. it could escalate. year,his is the time of sarah. we should be talking about earnings and how to the dynamics play together? areh: equity investors interested in the earnings. they have come in strong. headlinesade trickling in and they don't seem to end. maybe toward the beginning of the week it seemed we would be focusing on earnings. we had the interview clip leaked and the tweets fro

joining us now is sarah mcgregor. the u.s. expected to do? >> the u.s.s going forward with its plan to put tariffs on chinese goods on friday. i think it is important that china decided to reschedule its retaliation and not necessarily put it into place right away. waiting for the announcement is something that we are thinking that we really want to see the u.s. decision come down here. as we all know, the trump administration has retreated from trade threats that it has made in the past. there is no reason to believe that the chinese tariffs will not take effect. everyone was wait until that decision is made before we see the rubber hits the road. hourswe are still 24 ahead of when that will happen here. german auto industry lenders are making the case to the white house on a trade feud will cause irreparable it -- damage to global business. >> we have heard from u.s. automakers submitting comments for this auto import probe that the trump administration is trying to determine if imports pose a threat to national security. we have heard from gm and a lo

is reporter sarah mcgregor. chinese policymakers digging in for a lengthy fight. they keep stressing in their remarks that they are not the aggressor. why do you think that is? >> the whole impetus of these tariffs was the trump administration. they looked into china's practices on intellectual property and they found that it violated the rules. this is what started this whole tariff war. i think china wants to, it has been painting itself as a globalist ever since donald trump was elected. they are trying to champion themselves as a world leader at this time and contrast themselves with the trump administration. tois important for them showcase themselves as responding to the tariffs and also within the wto rules, retaliating has a bigger scope for rationale than actually imposing tariffs in the first place. >> do we know of any on either to going have this off or to make these tariffs short-lived? trump is on his way to montana right now. he is going for a political speech there. he may say something at the rally that would surprise us or he will be speaking to

sarah mcgregor, thank you so much, reporting from washington.ill stay on the topic of trade. from new york, this is bloomberg. ♪ taylor: this is bloomberg markets. i'm taylor riggs. scarlet: and i'm scarlet fu. the french davos is taking place this weekend, and we spoke with nyu professor nouriel roubini about the trade war. right now there is less synchronized global growth, the eurozone, japan, the u.k. are slowing down. the two bright spots in the global economy were the u.s. and china, and now we are at the beginning of a generalized trade war not just because the u.s. and china, but because the u.s. is a must going to -- cars of the united states, and even nafta right now looks dead on arrival taste on the fact -- a perfect storm where the u.s. is engaged in trade wars with europe, the nafta partners and china, and there could be a slowdown of global economic growth. >> at the same time, i do not know how much reform you think has been done, but does that push us the case you laid out? i do not expect a or a recession, but this global expan