Trade tensions between the U.S. and China could go into "a temporary hiatus" in the coming months, but would remain unresolved until the presidential elections in 2020, according to Standard Chartered Private Bank.
That's because Washington's decision to resolve tensions with Beijing will likely be driven by politics, said Steve Brice, chief investment strategist at Standard Chartered Private Bank. U.S. President Donald Trump will be seeking a second term in the White House during the 2020 presidential elections.
"I think it's going to be a political decision: Does it actually bode well for the U.S. having solved, in Trump terminology, the China trade issue today? One could argue that actually, he'd be better doing that six months before the elections so he's got the tailwind going into his re-election bid," Brice told CNBC's "Street Signs" on Thursday.
A tailwind refers to a situation that will push economic growth and company earnings higher.
Two recent polls in the U.S. found that Americans like the president's handling of the economy, but that has failed to boost his overall approval rating. Those trends signal possible trouble for Trump's re-election bid if the economy loses steam.
"You might see a temporary hiatus ... but then when you get closer to the presidential elections, then this flares back up and then we'll see tensions rising again," said Brice.