Why the US-China trade war won’t last
How Trump’s trade war is unraveling the Trump rally
By Matt Egan, CNN Business
Tuesday, May 14th 2019
The United States and China don’t just coexist. Their massive economies are deeply intertwined in ways that make the intensifying trade war unsustainable.
Tariffs are the weapons of choice as both sides attempt to improve their negotiating leverage. Consumers and businesses find themselves caught in the crossfire. The levies will increase costs, muddle supply chains and drive up debilitating uncertainty.
UBS cut its 2019 GDP growth forecast for China from 6.4% to 6.2%. While Beijing will try to soften the blow with stimulus, UBS said growth could slip below 6% in 2019 and 2020 if the trade war deepens.
“The risk is monstrous. It’s very troubling,” said David Kotok, chairman and chief investment officer at Cumberland Advisors.
The interconnectedness of China and the United States has been driven in part by the millions of people in China that have been lifted out of poverty.
“You have an expanding middle class wealth effect,” said Kotok, who also serves as director of the Global Interdependence Center, an organization advocating for the expansion of free trade.
Read the full article here: CNN Business
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