A story from the Wall Street Journal indicated earlier that the tariffs would not be applied on December 15, and Washington could even put an end to the tariff hikes imposed over the last 20 months on 360 billion of US imports from China. And China would do the same, and even purchase $50 billion of US agricultural products, and renounce intellectual property theft and pledge not to manipulate the yuan.

Markets went crazy with the good news until Trump ruined everything with a tweet: “The Wall Street Journal story on the China Deal is completely wrong, especially their statement on Tariffs. Fake News. They should find a better leaker!”

History often repeats itself

So, are we all back to square one? Is a deal still on the cards but not under the terms detailed in the Wall Street Journal? As we write, China is announcing a press conference. But in any case, whether or not we get a deal will not change much. Make no mistake, the trade war is only starting.

The bigger picture is that Washington is threatened by the emergence of China as the dominant power for the 21st century. And it is therefore necessary to prepare for a long arm-wrestling match.

The United States has reasons to fear China. Its economic rise is spectacular and the Communist Party is not hiding its goal of returning the former glory of the Chinese nation. The country wants it all: economic, military, diplomatic and cultural global influence. President Xi Jinping's Belt and Road initiative is a clear example. China has set a deadline of 2049, the centenary of the People's Republic, to overtake the United States economically.

As China's power increases, how will the United States react? History shows that when the number 2 tries to overtake number 1, conflicts results, as with Athens and Sparta. In a world run by the global economy, trade is the weapon of choice. Investors should brace for more tarrifs and sanctions in the next few years...