US-China trade war leading to recession, says Goldman Sachs


by   |  VIEW 630
US-China trade war leading to recession, says Goldman Sachs

Dampening outlook of a stack of death-crossed money markets across the globe, Goldman Sachs Groups Inc., one of the largest US-based multinational investment banks, headquartered on New York, said on Sunday, the 11th of August 2019, that, the Sino-US trade spat might be leading global economy towards a recession earlier-than-anticipated, while the NY-based multinational lender had also forecasted that it had no longer been expecting a trade deal between two of the largest global economies before 2020 US presidential election.

Since the yearlong trade disputes between Washington and Beijing entering into its second year had roiled critical issues likes of tariffs, subsidies, intellectual property, technology alongside cyber security, currency manipulation and a many more, Goldman Sachs wrote in a client note on Sunday (August 11th), “We expect tariffs targeting the remaining $300bn of US imports from China to go into effect,” adding that the lender had no longer been expecting a trade deal before 2020 US presidential election as beforementioned.

Aside from that, setting the stages for a recessed US economy, Goldman Sachs’ analysts had downsized Q4, 2019, growth forecast for US economy to 1.8 percent from an earlier 2 percent, much-lower than Trump Administration’s expected figure of 3.0 percent, while the NY-based lender wrote in a client note authorized by three of its economists, Alec Phillips, David Mericle and Jan Hatzius, “Overall, we have increased our estimate of the growth impact of the trade war,” adding that a growing import expenses amid tariff hike and supply chain disruptions would force US companies to curb their domestic activity.