Threat to the world. The consequences of a trade war US-China

Угроза миру. Последствия торговой войны США с КНР

Trade war between America and China threatens the world economy

The conflict between the two biggest economies of the planet affect 2.5 per cent of global trade volume.

Trade war the United States and China does not stop, and will only be exacerbated. American President Donald trump has signed a new increase in import tariffs on shipments from China. Thus the conflict affects 2.5 per cent of world trade and trump has no plans to stop.

Against this background, the dollar declines against major currencies, oil prices also falling. Investors expect a slowing global economy and tightening of monetary policy in developed countries. Корреспондент.net tells details.

 

A new round of trade war

On September 18, the President of the United States Donald trump announced the introduction of a ten percent import duties on Chinese goods worth around $ 200 billion.

“We very clearly stated the changes which should be made, and we’ve given China every opportunity to treat us fairly, but so far China is not willing to change your approach,” said trump.

In this case, if China will respond with duties on goods farmers or industries of the United States, trump promises to move on to the third stage – the extra import cost of about 267 billion dollars. They already raised all Chinese imports.

The document about the increase in fees will take effect on September 24. Thus by the end of this year, their size will increase in two and a half times – up to 25 percent.

These measures are designed to give U.S. companies time to adjust their supply chains and shifting to supplies from other countries.

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China has promised to respond to the new duties of the United States, and the Chinese press calling for an aggressive counterattack.

Trade conflict between the two largest economies in the world and the main consumers of oil commenced on 15 June. After investigation, the trump has accused China of stealing intellectual property and technology, and “unfair trade practice”.

The US imposed duties of 25 percent on imported from this country goods worth $ 50 billion.

As a countermeasure, China on the same day, imposed a duty of 25 percent on imports of an equivalent amount of American goods. In August, the U.S. imposed a duty of 25 percent on imports of Chinese goods with a volume of 16 billion dollars, immediately after that, the Chinese side introduced similar measures.

Confrontation between the US and China is hurting the global economy

New American US tariff against China are global economic risks, since they involve already 2.5 per cent of global trade volume, according to the report one of the largest banks ING.

If a trade war is gaining momentum, the figure will increase to four per cent, experts warn.

The contradictions between the two countries may further increase in 2019, as China plans to impose retaliatory measures against American goods.

The September survey of 244 portfolio managers, spent by analysts Bank of America Merrill Lynch showed that investors are confident about the fate of the world economy next year is reduced.

Those who believe that economic growth will be below the averages of recent years, a quarter more than those who believe in higher values. This is the worst performance since December 2011. Two months ago, optimists had 19 percent more than pessimists.

Against the us dollar. As the world has entered a currency war

The biggest threat to world economy bears a trade war between the US and China. So say 43 percent of respondents investors.

Analysts of international rating Agency Moody’s predicts the continuation and tightening of a trade war between the US and China and the introduction by both parties of all the new measures.

“We believe that trade conflict will not stop until full implementation of the most severe potential measures mentioned so far, including tariffs on all imports of cars in the United States or the collapse of NAFTA (the free trade agreement between Canada, USA and Mexico),” – said in the report.

According to analysts Moody’s, although a trade war and will have a negative impact on the us economy (so, it will constrain GDP growth of 0.25 percent), in General, this impact will be overcome, the economy will grow the GDP in 2019 will amount to 2.3 percent.

As for the impact on the Chinese economy, trade conflict will reduce GDP growth by 0.30-0.5 percent, though this can be offset through fiscal and policy easing by Chinese authorities, GDP in 2019 could increase by 6.4 percent.

 

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