TAIPEI, Taiwan, September 28, 2018 (Newswire.com) - Evans Chamberlain Asset Management analysts say that, based on a simulation created by the European Central Bank, the United States could stand to lose far more than other countries in a global trade war and China could be in a better position after retaliating.
Earlier this year, U.S. President Donald Trump stated that trade wars were positive events and easy to win as he launched a trade tariff attack on China that has escalated to the imposition of tariffs on aluminum, steel and billions of dollars’ worth of goods imported from China.
The recent study conducted by the European Central Bank simulated a scenario where the U.S. would impose a 10 percent tariff on all goods imported from other countries and the equivalent retaliatory tariffs imposed on U.S. exports. Evans Chamberlain Asset Management analysts say that the results of the ECB simulation suggest that the US would suffer the most from trade disruption and the impact of diminished investor and consumer confidence.
Evans Chamberlain Asset Management analysts say the ECB study shows that US growth could decrease by more than 2 percentage points with the IMF currently forecasting growth of 2.9 percent this year and 2.7 percent in 2019. China, on the other hand would benefit from greater exports to countries where US goods are subject to duties.
The simulation also showed that global trade could decrease by as much as 3 percent.
Although the ECB study is theoretical, and Evans Chamberlain Asset Management analysts say actual trade conditions are not replicated, the U.S. has already imposed tariffs on Chinese exports worth $200 billion and China has imposed retaliatory tariffs on $60 billion of goods imported from the US.
Source: Evans Chamberlain Asset Management