With new tariffs set to take effect from Sept. 1, Goldman Sachs Group Inc. no longer expects a trade deal before the 2020 presidential election and has revised lower its forecast for the US fourth-quarter gross domestic product by 0.2 percentage points to 1.8%.
Two weeks ago, the US President Trump abruptly ended the trade truce by saying that additional 10% tariffs will be imposed on $300 billion worth of Chinese goods.
Beijing retaliated on Aug. 5 by halting purchases of US agricultural goods and allowing the Yuan to fall beyond 7 per US Dollar for the first time since 2008. Trump’s administration fired back within hours by labeling China a currency manipulator.
Key points (source: Bloomberg)
“Fears that the trade war will trigger a recession are growing.”
“We have increased our estimate of the growth impact of the trade war.”
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