Investors are underestimating the severity of the US-China conflict by viewing it solely through the lens of trade, according to Ron Temple, the head of US equity at Lazard Asset Management.In an interview with Business Insider, he explained why a trade agreement will not resolve much between both countries, and discussed why the risk of a recession is still alive and well.Click here for more BI Prime stories.In the wild ride that is the trade war, any headline on progress is welcome news for investors.Stocks surged on Friday after President Donald Trump tweeted "good things" were happening during the latest round of trade negotiations. He followed this with news that the US reached a "very substantial phase one deal" with China.But not everyone is buying this optimistic narrative. And they include Ron Temple, the head of US equity at Lazard Asset Management.Even before the monster rally that sent the Dow Jones Industrial Average up 500-plus points, Lazard believed investors were overlooking signs that the conflict is more intense than it appears on the surface.His first point of departure is that the ongoing tussle is not merely about commerce or trade.In fact, conflict of this nature is not new. The world's largest economies have combated each other for years, hurling allegations that range from intellectual property theft to clampdowns on foreign investment.But there's more novelty to their economic conflict than the reciprocal tariffs they have levied over the past year and a half. And Temple says it won't simply be resolved by China agreeing to buy more American soybeans."A lot of investors are underestimating the difficulty and potential severity of that national security-related part of the relationship, and underestimating what it means when you go from just being economic competitors to basically strategic adversaries," Temple told Business Insider by phone.Read more: Nobel laureate Robert Shiller forewarned investors about the dot-com and housing bubbles. Now he tells us which irrational market behaviors have him most worried.He does not recommend that investors get too enthusiastic about any type of trade agreement. Instead, they should keep in mind that a trade agreement won't remove the toxicity in the US-China relationship."My perspective has beenand will continue to be until proven wrongthat even if we do reach some kind of a deal, the question then is when the US accuses China of having cheated," Temple said.He added that there's a lot of pressure on both Trump and China's Xi Jinping to decline a comprehensive deal because any such agreement would subject them to accusations of being too soft.A 'mild' recessionDespite his measured take on the trade situation, he does not expect the US economy to devolve into a severe recession that resembles the 2008 crisis.But the risk of a mild recession remains."Even if we get some near-term deal, I think it's unlikely that you see the tariffs that have been put in place go away," Temple said.It only means more tariffs won't be added, he said, meaning that the supply-chain disruptions companies are experiencing will remain in place.In the event of a mild recession, the stock market has plenty of room to fall."It might be something really short and shallow, but the impact on corporate earnings tends to be a lot more significant than that would imply," Temple said. "And if you've got relatively elevated valuations in many parts of the market, there's not a lot of room for error."SEE ALSO:The world's most accurate economic forecaster sees a 'prolonged global slowdown' on the horizon ' and warns it can only be narrowly avoidedJoin the conversation about this storyNOW WATCH: Stewart Butterfield, co-founder of Slack and Flickr, says 2 beliefs have brought him the greatest success in life Click here to read full news..