"According to a recent survey by the National Association for Business Economics, seven out of 10 economists expect a recession by the end of 2021."
We are nearing the end of 2019 and there has been little resolution to our trade war with China. Trump has actually renewed trade tensions recently. He has even stated there is "no deadline" for the trade war and claims that he wants to wait till after the 2020 election to fix this problem. This may be in response to some economists beliefs that Trump is waiting ease tensions with China right up until the election.
However, our domestic and global economies will not go on pause until he is ready to end this war. As we learned in class, imposing tariffs raises interest rates and lowers the amount of overall trade. If action is not taken soon, business investment may drop further due to trade uncertainty. And since investment is very volatile, GDP can decrease significantly, potentially contributing to a recession
https://www.washingtonpost.com/news/powerpost/paloma/the-finance-202/2019/12/04/the-finance-202-trump-could-spark-a-global-recession-if-he-imposes-more-china-tariffs-economists-predict/5de6e17688e0fa652bbbdbac/
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ReplyDeleteA lot of corporations are now moving their manufacturing else where to abscond these increasing manufacturing prices, I wonder if large corporations will also follow this trend and manufacture somewhere else. If this trade war continues a lot longer I would expect more companies to leave China, especially if their goals are to expand their companies, which is obviously a main goal for any company.
ReplyDeleteI think it will come down to who flinches first of these two powerhouse economies. As we have seen, neither nation seems willing to do that and therefore I don't know if we will see the trade war settling anytime soon.
ReplyDeleteThe trade war will be an incredibly interesting factor to watch during this Holiday season. It will be a tense time in the US economy dealing with all of the pushback and uncertainty that has come from the consumer side.
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