The Consequences: Full-Blown Trade War Will Push World Towards Recession

[rainman + 263]

A collapse of U.S.-China trade talks and hike in tariffs on Chinese goods would push the world economy towards recession and see the Federal Reserve cut U.S. interest rates back to zero within a year, analysts at Morgan Stanley said on Monday. While a temporary escalation of trade tensions could be navigated without much damage at all, a lasting breakdown would inflict serious pain. “If talks stall, no deal is agreed upon and the U.S. imposes 25% tariffs on the remaining ~US$300 billion of imports from China, we see the global economy heading towards recession,” the bank’s analysts said in a note. In response, the Fed would cut rates all the way back to zero by spring 2020 while China would scale up its fiscal stimulus to 3.5% of GDP (equivalent to around $500 billion) and its broad credit growth target to 14-15% a year they added.

[pinto + 293]

Tariffs will raise prices on all sides

[damirUSBiH + 327]

It will only accelerate all the process...

[Pavel + 384]

Here it comes...

 

[francoba + 93]

I figure that the Chinese will just stop selling to the U.S., other suppliers will raise their prices, and inflation will go through the roof. Commodity prices will never come back down. As usual, the poor will struggle even harder....

[50 shades of black + 254]

I'm aware that we have no guarantee just how bad it could get and how far it could hurt us all....