One of America’s top investors believes the trade war with China won’t do enough damage to push the US economy into recession.
Blackstone (BX) chief executive Stephen Schwarzman said Wednesday that while both countries are engaged in a “high-wire act,” the damage would not cause a severe economic slowdown next year in the United States.
“It’s not that big of a game to throw us into recession,” he told CNN Business in an interview.
The assessment puts Schwarzman at odds with other investment professionals and economists who fear the trade war could cause a recession.
A survey of economists published earlier this month by the National Association for Business Economics found the risk of a recession happening soon remains low but will “rise rapidly” next year.
Their primary fear: protectionist trade policy.
The increasingly gloomy outlook comes after the United States ratcheted up the trade war with China and sparred with other major trading partners, including Mexico and India.
Schwarzman, who has a long history of doing business in China, said that a meeting between Trump and Chinese President Xi Jinping at the G20 summit later this month could help reset the relationship.
“One would hope that both countries can find a way to work together,” he said, noting that the economies of both countries will suffer if progress is not made.
Schwarzman said that Trump was playing a “longer game,” and seeking to address inequities in the trading relationship between the world’s two largest economies.
He said that China should abide by World Trade Organization rules, and work to further open its vast markets and promote free trade.
“Logic would say that China would find a way to accommodate coming into the more modern world,” said Schwarzman. “They are smart people. Hopefully they won’t go off in a direction alone.”
