Echoing the comments laid out last night by Standard Chartered’s Steven Englander, this morning Goldman Sachs doubled down on how the US-China trade war will progress in the near-future, warning that it expects the tensions to get worse, at least initially. Speaking to Bloomberg TV, Goldman’s co-head of EM and FX research, Kamakshya Trivedi, said that “we think that trade tensions will probably worsen before they get better.”

Trivedi also predicted that “we’ll see probably see more weakness in the renminbi” over the next three to six months, a prediction that certainly has proven accurate today, with the onshore Yuan sliding to the lowest level since August 2011.

“There’ll be more stability after that, thanks in part to China’s growth holding up ok”, according to the analyst who doesn’t think that Beijing will “treat the currency as a weapon, but some of the weakness so far won’t be unwelcome to Chinese policy makers.”

In a separate note, overnight Goldman economist Alec Phillips writes that the release of the list of $200BN in tariffs on Chinese imports “raises the probability that further tariffs will be implemented” adding that Goldman was somewhat taken aback by the timing of the announcement: ”

“We had expected that the next round of tariffs on $16bn in goods could be implemented by late August or early September, so the implementation of this next round of $200bn, if it happens, looks unlikely to occur until September at the earliest.”

Phillips also writes that networking equipment, computer components, and furniture would be the most heavily impacted imports in the newest round of tariffs. He adds that the list avoids consumer goods, including apparel more than Goldman had expected, while share of computer components, furniture affected is larger than anticipated.

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