(Bloomberg) -- Uncertainty around what will happen next in the U.S.-China trade war isn’t just keeping the the world guessing, but also economists.
In a Bloomberg News survey of 31 economists and analysts, responses varied widely on how long the tariffs will last and how big they will get. Estimates of the trade war’s duration were distributed fairly evenly in a range of three months to three years, with a median estimate of 12 months.
For the maximum value of goods subject to U.S. tariffs through the end of 2019, analysts projected a median of $200 billion, but responses were as small as the current $34 billion, all the way up to the entire $505 billion of annual imports from China.
The variation in responses underscores the difficulty of predicting President Donald Trump’s actions, along with skepticism that either China would quickly fold or that Trump would follow through on his biggest tariff threats. In the latest developments, the U.S. and China signaled this week they were open to resuming negotiations over trade after days of exchanging retaliatory threats.
Talks between the world’s two largest economies have stalled since June, amid U.S. complaints over the bilateral trade deficit and China’s alleged theft of intellectual property.
“They don’t even agree on what the source of the problem is,” said Tom Fullerton, a survey respondent and economics professor at the University of Texas at El Paso, who predicted the tariffs will last 18 months and reach $450 billion in goods. “It makes it very difficult to envision either side backing down at this point.”
The survey was conducted July 6-11. Analysts were asked how long the $34 billion in tariffs implemented July 6 would remain in effect, and for the maximum value of goods subject to tariffs through the end of 2019.
The Trump administration on July 10 proposed a list of an additional $200 billion of Chinese goods that would be subject to levies. Survey responses submitted after that news skewed toward a bigger trade war. The median estimate of maximum tariffs following that announcement was $300 billion, while the duration was the same at 12 months.
KC Mathews took a more sanguine view. The chief investment officer at UMB Bank in Kansas City, Missouri, predicted tariffs will top out at $50 billion in goods, and China will come to the negotiating table within a year.
“We’re of the opinion that the current administration knows the data that trade wars are bad for economic activity,” Mathews said. “We are hopeful that this firm strategy and perhaps firm talk about potential tariffs will bring parties to the table to discuss.”
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