Trade war: Rising costs and possible recession?

Trade war: Rising costs and possible recession?

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

Trade war to hurt corporate profits, growth and consumers

  • New round of tariffs on Sept 1 will raise cost of trade war to $80 billion
  • US, China likely to share cost equally; Chinese growth to slow by 0.33%-0.5%
  • US corporate profits could fall by 2%-2.5%, consumer prices could rise slightly
  • Sharper declines in business confidence, investments could worsen impact
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Will the trade war cause a recession?

  • July rate cut absolves Fed of a policy mistake causing a recession
  • Escalating US trade war with China could instead become the target
  • US business investments have slowed, companies diversifying supply chains
  • US economic expansion likely to slow down but no recession in sight
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Manage trade war outcomes in global markets with CME Group

See how CME Group’s tools, economic research and education can help you track the effects of the trade war and better manage market outcomes.
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