Moneycontrol
Get App
you are here: HomeNewsWorld
Last Updated : Aug 12, 2019 11:27 AM IST | Source: Reuters

Goldman Sachs economists say fears rise that US-China trade war leading to recession

The year-long trade dispute has revolved around issues such as tariffs, subsidies, technology, intellectual property and cyber security, among others.

Goldman Sachs Group Inc said on August 11 that fears of the US-China trade war leading to a recession are increasing and that Goldman no longer expects a trade deal between the world's two largest economies before the 2020 US presidential election.

"We expect tariffs targeting the remaining $300bn of US imports from China to go into effect," the bank said in a note sent to clients.

US President Donald Trump announced on August 1 that he would impose a 10% tariff on a final $300 billion worth of Chinese imports on September 1, prompting China to halt purchases of US agricultural products.

Close

The United States also declared China a currency manipulator. China denies that it has manipulated the yuan for competitive gain.

The year-long trade dispute has revolved around issues such as tariffs, subsidies, technology, intellectual property and cyber security, among others.

Goldman Sachs said it lowered its fourth-quarter US growth forecast by 20 basis points to 1.8% on a larger than expected impact from the developments in the trade tensions.

"Overall, we have increased our estimate of the growth impact of the trade war," the bank said in the note authored by three of its economists, Jan Hatzius, Alec Phillips and David Mericle.

Rising input costs from the supply chain disruption could lead US companies to reduce their domestic activity, the note said.

Such "policy uncertainty" may also make companies lower their capex spending, the economists added.

Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.
First Published on Aug 12, 2019 11:15 am
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant