Web Desk(October 09, 2018): The trade war is set to take its toll on the American and Chinese economies in 2019.
“When you have the world’s two largest economies at odds, that’s a situation where everyone suffers,” Maurice Obstfeld, the IMF’s chief economist, said at a media briefing about the fund’s latest World Economic Outlook.
Despite healthy momentum in the United States, which received a boost from recent tax cuts, IMF economists now expect growth to slow to 2.5% next year from 2.9% this year. They cut the 2019 forecast by 0.2 percentage points because of the trade conflict.
The Trump administration has slapped tariffs this year on roughly half of the products that China sells to the United States annually. President Donald Trump has threatened to expand the tariffs to cover all US imports from China. Beijing has responded with tariffs on American goods worth more than $110 billion.
China’s growth is now expected to drop to 6.2%, from 6.6% this year, according to the IMF. The new 2019 forecast is 0.2 percentage points lower than the fund’s previous forecast, reflecting the waves of new tariffs that have taken effect since then.
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