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Recession within 12 months, if China-US trade war gets worse.

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Okay, after reading through many articles, I believe the country which will go into a recession should the current trade war between China and the US got worse is the US. Besides, the trade war may cost investors up to US$7 trillion (RM29.33 trillion). click here to read. I have no idea how the trade war can get worse but I think it has a lot to do with China ‘fighting’ back since there seems to be no room for negotiation. There has been articles about countries benefiting from this trade war but perhaps we do not need to look too much into this because if this is the reason for economic growth, it simply meant that as soon as China and US stops their war, all these ‘benefits’ may reduce or even disappear.

Article in thestar.com.my Chetan Ahya, chief economist and global head of economics at Morgan Stanley said a recession could start within 9 months if President Donald Trump pushes ahead with the 25% tariff on an additional US$300 billion of Chinese exports and China retaliates. Ahya wrote in a note that even with the declining stock market, the trade war may have a bigger impact on the global macroeconomic outlook. He said that growth will suffer as costs increase, customer demand slows, and companies reduce capital spending. In fact once the negative effects of the tariffs become more apparent, it may be too late for political action. The policies to ease the impact are likely to be too reactive and slow to take effect. China issued a White Paper on Sunday that said the escalating trade war between the world’s two largest economies hasn’t “made America great again.” The paper said that Trump’s trade policies have hurt the US economy by increasing production costs, causing prices hikes, damaging growth and people’s livelihoods and creating barriers to US exports to China. Article in thestar.com.my

Hopefully, something positive can happen in a potential meeting end of June between both leaders though there are already predictions that the meeting will not be happening. Huawei has been banned by the US. Apple has not received the same treatment by China, at least not yet. As for who will eventually win, this is the opinion of New York TImes: Trump Hands China an Easy Win in the Trade War As for the world, well, everyone is getting jittery: Global stocks sink as China says it won’t back down in trade war with the US Besides the economy and the stock market, what about the effects on the job market? Here’s a piece of opinion. The biggest winner? Reports point to an ASEAN nation; Vietnam. read it here. Happy following.

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Article written and edited by Charles. News article summarised by Dina Batrisyia.

<Featured Image is courtesy of Stock Photos from gguy >

Next suggested article: Malaysia in same list as China as a potential currency manipulator

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