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The COVID-19 crisis will accelerate the capital, trade, and technological war between the US and China. 

Speaking to CNBC's “Squawk Box Europe” on Tuesday, Michael Howell, CEO of Crossborder Capital, warned that the first phase of the US-China trade deal is in jeopardy, and there may even be a new battlefield: capital investment.

“I think the real tension oncoming is not just trade wars but capital wars — we’re in a world where capital wars matter,” he said, noting that there was “an awful lot of liquidity” being poured into markets amid the COVID-19 crisis.

Governments and central banks all over the world have deployed unprecedented stimulus packages to curb the economic shock of the pandemic. President Donald Trump approved a $ 2 trillion aid bill in March.

Meanwhile, demand for the dollar rose amid an outbreak, causing a deficit and affecting other currencies.

In response, the Federal Reserve has expanded existing dollar swap lines so that more institutions can access dollar financing.

However, Howell believes that American politicians have ulterior motives to make American currency more accessible internationally.

“The decision to share dollar swap lines with 14 other nations, effectively forming a de facto group of 15 countries, including America, that have access to dollars, that is a critical development,” he said.

Howell called the move the “economic equivalent of NATO,” which he noted was established to contain the Soviet Union militarily.

“This is trying to contain China economically,” he said. “There will be further salvos fired in this capital war, this technology war, this trade war. Essentially, America and China are clear rivals and the coronavirus crisis has simply accelerated these trends.”

Global forecasting director of The Economist Intelligence Unit (EIU), Agathe Demarais, told CNBC that pre-existing geopolitical tensions would likely be accelerated by the COVID-19 pandemic.

“The coronavirus epidemic is not going to change the ongoing fragmentation, the ongoing polarization of the geopolitical picture,” she said in a phone call. “But we think it’s going to accelerate ongoing processes of countries such as Russia and China seeking to play a bigger role in the global stage and to reassert their position on the global stage.

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