There'll be 'blood on the streets' until China and the US reach trade deal, Mark Mobius says 

  • Beijing and Washington have engaged in a tit-for-tat trade battle since near the start of the year, when the U.S. imposed tariffs on laundry machines and solar panels coming from China.
  • Trade negotiators from both sides have met on several occasions this year, but so far the talks have failed to reach any clear outcome.

Expect much confrontation between China and the United States until they reach an agreement on trade, noted investor Mark Mobius told CNBC on Tuesday.

"(China is) going to be tough to begin with and they are not going to give in easily, because you're talking about (a $)300 million trade deficit in China's favor, so they are not going to give up that easily," the founding partner at Mobius Capital Partners told CNBC's "Squawk Box Europe."

"But I would say, maybe after six months they will come to some agreement and that will be done. But in the meantime, there will a lot of blood on the streets," he added.

Beijing and Washington have engaged in a tit-for-tat trade battle since near the start of the year, when the U.S. imposed tariffs on laundry machines and solar panels coming from China.

The U.S. blames China for its trade deficit figures and has repeatedly slapped new levies on Chinese goods. Beijing has so far retaliated to each set of tariffs.

Trade negotiators from both sides have met on several occasions this year, but so far the talks have failed to reach any clear outcome.

Zeng Qinghong, chairman of Chinese auto firm GAC Group, told CNBC's Annette Weisbach on Tuesday that should the trade war continue, it would adversely affect the global economy.

Speaking at the Paris Motor Show, he said his firm was already having its plans disrupted.

"We originally planned to launch our 'Trumpchi' cars in the U.S. by the end of next year, but now with the introduction of the 25 percent additional tariffs, it has certainly had a pretty big impact on our plans," Zeng said.

The U.S. reached a trade agreement with Canada and Mexico on Sunday just hours before a midnight deadline to revamp their NAFTA deal. The three countries had been in talks for more than a year.

Also speaking at the Paris Motor Show, Johan van Zyl, president and CEO of Toyota Europe, said he welcomed the new arrangement and hoped it could mark the beginning of fresh trade deals across the world.

"We hope this will also now pave the way to stop the start of trade embargos or activities that are going on," he told CNBC.