Andrew Neil: Cold War Will Be The New Normal Of The 2020s

He said although the trade war has been cited as one of the biggest threats to global growth - and one that could force the world economy into recession - it is actually a theme investors are going to have to get used to as a "price of doing business in the markets today".

"I do not think many investors have grasped this yet," Neil said. "This is not a trade war between the US and China. It is true that trade is one of the weapons, perhaps the crucial weapon in this cold war. 

"But it is not a trade war. It is a war for technological dominance in the 21st Century, between the US and China, with Europe essentially being a spectator at the feast."

Trade wars - should you pick a side?

He also said while President Donald Trump has been at the forefront of pushing for higher trade tariffs with China and other countries, the origins of this "tech war" are with the Barack Obama administration.

Neil said during the final days of Obama's Presidency, a 200-page "forensic report" found "in minute detail how China had abused the system since it joined the World Trade Organisation in 2008".

"It detailed cyber theft on a grand scale; the forced transfers of intellectual property (IP) from Western companies to Chinese companies for the Western companies that wanted to do business in China; and the strategic buying spree of the Chinese to buy advanced technological Western companies. 

"This was a one-way street because Western companies could not buy their equivalents in China itself. And in the conclusion of this report, the US calculated the Chinese theft of US IP rights was costing it between $300bn and $600bn a year. It was clear that no US administration could allow this to continue."

Neil added that under Obama, there were some "half-hearted attempts" to thwart this but once Trump became President, the "full-throated response" came in.