Anti-China sentiment is rising in Washington — and Beijing should not underestimate that, a former under secretary for international affairs at the U.S. Department of Treasury said on Thursday.
"I worry that Chinese authorities ... underestimate how broadly the anti-Chinese sentiment is in Washington — it runs across the full political spectrum," said Tim Adams, who is now president and chief executive of the Institute of International Finance (IIF), a trade association.
Even though the current administration is the one that has led the charge on the trade war with China, he said, "almost all" the 24 Democrats running for president in 2020 have "some sort of anti-Chinese sentiment" — whether it be trade or something larger.
"Washington has become decidedly anti-China," Adams told CNBC at the IIF meeting in Tokyo on Thursday.
Similarly, he is concerned that Washington does not understand the rhetoric from Beijing.
"I worry that there are those in Washington who think they understand the Chinese mindset, and that they can force President Xi Jinping to bend (to) the will of Washington's desires, and maybe not appreciate ... the rhetoric coming out of China," he said.
His comments come as skirmishes between the world's two major powers intensified in recent weeks.
U.S. President Donald Trump announced in early May that tariffs on $200 billion worth of Chinese goods would go up from 10% to 25%. The U.S. has also started looking into whether another $300 billion worth of Chinese goods will be subjected to tariffs. China responded with its own levies on $60 billion of American imports.
Last week, Chinese Vice Foreign Minister Zhang Hanhui said that provoking trade disputes amounted to "naked economic terrorism." Chinese media also warned the U.S. that Beijing could cut off industrially significant rare earth minerals as a retaliatory measure in the escalating trade battle.
Both sides have ramped up the battle on the tech and education fronts as well.
On Tuesday, China issued a warning to its citizens about working, studying and traveling in America, noting that the U.S. has recently placed certain restrictions on some Chinese student visas.
Adams warned that the world powers could make "miscalculations" as tensions ramp up, and that could trigger a growth slowdown.
Turning to the U.S. economy, he said: "I don't think the economy is going to hit a wall anytime soon, unless we make serious policy mistakes — which we're capable of doing."
However, he pointed out that there could be "miscalculations" in Washington, Beijing and other capitals, where trade and nationalism are concerned, and that could "potentially trip us into a lower growth trajectory."