Washington’s trade fight with China can be overshadowed by US tensions with Iran

For much of 2019, the U.S.-China trade fight dominated investors’ attention. But, on Monday, a political risk consultant predicted that it will likely get overshadowed by tensions between the U.S. and Iran this year.

Alastair Newton, director of Alavan Business Advisory and a former British diplomat, told CNBC’s Squawk Box Asia said, “I actually think this (Iran) is going to be a more important issue for investors this year than China-U.S.” He predicted more Iranian retaliation this year after Tehran fired missiles at Iraqi bases housing U.S. troops last week in retaliation for the U.S. killing of top Iranian general Qasem Soleimani.

He didn’t predict how Iran could retaliate, but other experts have said future moves may include cyberattacks and aggression by Iranian proxy groups in the region.

Newton said the relationship between the U.S. and Iran is “just going from bad to worse,” and so far there have been no signs the two sides could turn to diplomacy to resolve their conflict. His comment came as President Donald Trump tweeted that he “couldn’t care less” if Iran agrees to negotiate. Tehran doesn’t want to negotiate with Trump either.

Iranian authorities “are not going to talk with Donald Trump, the Iranians will hope that Donald Trump is defeated” in this year’s U.S. presidential election and they have a Democratic Party administration to deal with, he said.

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