Dell CEO: US and China face a 'mutual assured destruction' scenario on trade

  • The U.S. and China are on a path of "mutual assured destruction" if there's a massive breakdown in trade relations, Dell CEO Michael Dell says.
  • Dell appropriated the Cold War military idea of "mutual assured destruction" to describe the economic damage of a U.S.-China trade war.
  • "No one will win" a trade war, Dell contends, adding he expects the likelihood that it will happen as "extremely low."

The United States and China are on a path of "mutual assured destruction" if there's a massive breakdown in trade relations, Dell CEO Michael Dell told CNBC on Monday.

"The two countries are completely intertwined," Dell said in a "Squawk on the Street" interview. "It would be an extremely bad outcome for both countries."

Michael Dell, whose company's two largest markets reside in the U.S. and China, said "no one will win" a trade war. He expects the likelihood that it will happen as "extremely low."

Dell appropriated the Cold War military idea of "mutual assured destruction" to describe the damage a U.S.-China trade war would cause both nation's economies.

President Donald Trump has been attacking what he sees as unfair trade on a number of fronts, including imposing tariffs of 25 percent on steel imports and 10 percent on aluminum imports. Those measures have been met with retaliatory measures from the European Union, Canada, Mexico and China. The president also threatened tariffs on European auto imports.

Meanwhile, Trump instructed the U.S. trade representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent. That would be on top of the 25 percent tariffs on up to $50 billion of Chinese products. Those latter levies, announced on June 15, are set to start Friday. If that happens, China has promised to respond in kind.

Earlier Monday, Commerce Secretary Wilbur Ross said Trump isn't going to change his mind on trade even if the stock market keeps falling.

Michael Dell said his company is "as well-positioned as any company can be" in the event of a trade fight.

Dell appeared on CNBC after his company announced it would buy out the holders of shares that track the performance of the computer maker's 81 percent stake in VMWare, effectively making it public once again.

In the CNBC interview, Dell said the deal was a "relatively straightforward path," which will simplify the company's capital structure.

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