A tit-for-tat trade standoff between the U.S. and China has fueled market fears that the dispute could soon spiral into a full-blown trade war. Washington and Beijing have been embroiled in escalating tariff threats since early March — with market participants concerned about the potential impact of an ensuing trade war.
"The signal must be there is a new order emerging, and how that new order emerges will depend upon the wisdom, the patience and the understanding of the top leaders," Andrew Sheng, chief advisor at China's Banking Regulatory Commission, told CNBC's Steve Sedgwick on the sidelines of the European House Ambrosetti Forum in Italy Friday.
When asked whether he was optimistic about the prospect of political leaders finding an effective solution to the world's problems, Sheng replied: "I think so … We are now seeing a much more complex, much more subtle (and) much more nuanced search for the new order."
Late on Thursday, President Donald Trump instructed the U.S. Trade Representative to consider $100 billion of additional tariffs on Chinese goods. The further charges were being proposed "in light of China's unfair retaliation" against prior U.S. trade actions, Trump said in a statement.
China on Wednesday announced it would introduce tariffs on 106 U.S. products, including soybeans, cars and whiskey. The duties were introduced as a retaliatory measure against Trump, who just 24 hours prior, had unveiled a list of Chinese imports he planned to target with tariffs.
Sheng said the world was finally getting to grips with the "massive labor shock" brought about by globalization. And while Sheng said the ongoing trade dispute between the U.S. and China was a "very confusing situation," he added that he was hopeful of a positive outcome given the world wants to see "a sensible and measured way of negotiations."