Trade war between US and China would be quickly resolved because a deal is in the economic interest of both sides.
The nature of the Chinese system is that all policy is driven - either immediately or ultimately - by the politics of the ruling group. It dictates how the leadership will act by drawing its "red lines" in key areas affecting relations with the United States in particular. This is the context in which current trade frictions should be viewed. 'Made In China 2025' is not negotiable.
Trade war escalates, as we forecast, through spring, summer and fall 2018. Markets being to price in the reality of tariffs, FX moves, and the impact to inflation and growth. US-China relations sour further and trade talks are put on hold.