The escalating trade war between the United States and China has deepened fears that the global economy will fall into recession. The U.S. stock market was in turmoil last Friday, with the S& P 500. SPX closing down 2.6% and the Nasdaq down 3%.
The following is a summary of the analyst's comments:
Li Xunlei, Chief Economist of China-Thailand Securities:
Over the past year or so, the US deficit has increased without any reduction, but only geographically. At the same time, the United States imported less from outside, its own production did not increase significantly, nor did there appear "industrial reflux", but increased structural inflationary pressures.
Trade affects elections and Trump is under increasing pressure. According to statistics, in fact, during last year's mid-term elections in the United States, major exporting states such as agriculture, high-tech, automobiles and fossil fuels were affected by trade incidents, and the Republicans were obviously defeated. Recent pressure measures introduced by the United States can also reflect Trump's increasing pressure.
Looking ahead, we believe that although competition among big powers is hard to avoid, tariff increases themselves need not be overly pessimistic. On the one hand, the imposition of tariffs also put Trump under great pressure, even into a dilemma, which is difficult to sustain for a long time. Despite Trump's announcement of new tariffs, the effect on the U.S. economy and inflation will be greater. Trump's pressure will be opposed by more and more people, and its election will also be affected. On the other hand, it is the most important thing to do well in our country. The current real estate bubble is bigger and it is hard to stimulate. We must continue to push forward the market-oriented reform, speed up industrial upgrading and technological progress, so as to stimulate the new growth potential of the economy. Don't be too pessimistic if you do your job well.
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