Trade tensions between the United States and China will likely escalate further this year and have a negative but manageable impact on global growth, Moody’s Investors Service said on Tuesday.

Moody’s Investors Service says that its Asian Liquidity Stress Indicator (Asian LSI) fell to 26.2 per cent in December last year, from 26.4 per cent in November and 30.3 per cent at the end of 2016, signifying an improvement in liquidity for high-yield companies in Asia in December and from the end of 2016.