BlackRock, the world's largest money manager, predicts U.S. economic growth may dwindle to less than 2% this year as President Trump's global trade conflicts drive up prices and curb corporate investment.

The warning from the Wall Street firm, which handles $6.5 trillion in assets, follows a truce between Washington and Beijing in which Trump agreed to refrain from further tariffs on Chinese imports while the two nations try to negotiate a trade agreement. Previously imposed duties of 25% on $250 billion of Chinese goods remain in effect, and the White House has threatened levies on automobile imports while expressing irritation with Vietnam.

"The U.S. has become an exporter of geopolitical and economic uncertainty as the administration implements its 'America First' approach," Tom Donilon, chairman of the BlackRock Investment Institute, wrote in the firm's midyear outlook. "Tough rhetoric from both the U.S. and China, tit-for-tat tariffs and tensions over U.S. restrictions on Chinese tech signal an economic conflict that will be difficult to meaningfully resolve — temporary trade truces notwithstanding."

The uncertainty is likely to lower business confidence, curb investment in new plants, and limit hiring, since executives aren't sure how new policies will affect supply chains and costs. Only 65% of the leaders who participated in a Business Roundtable survey published in June expected sales to grow in the next six months, down from 73% in the first quarter and 80% at the end of last year, declines that were driven by trade conflicts.

BlackRock's assessment also echoes long-standing concerns from economists and some lawmakers from Trump's own party, all of whom have said his protectionist policies would undermine the economic growth spurred by GOP-led corporate tax cuts in late 2017.

Economic growth is a linchpin of the president's reelection campaign, and a slower pace could dampen voter enthusiasm. Expansion at a rate of less than 2% would be the slowest since Trump took office, compared with 2.2% in 2017 and 2.9% in 2018.

The president has brushed aside such concerns so far, however, arguing that tariffs are necessary to eliminate U.S. trade imbalances and win concessions from trading partners.

"We're doing very well with the tariff," Trump reiterated on Sunday. "We're taking in billions and billions of dollars from China. We've never taken in 10 cents from China."

While the duties have hurt China's economy by reducing demand for its exports, as BlackRock points out, the levies are all paid by American importers when their goods arrive in port, a fact businesses have noted repeatedly whenever Trump suggests otherwise.

Before the president temporarily suspended a threat to impose 25% levies on all remaining Chinese imports — goods worth more than $300 billion — retailers, farmers, and an array of other companies warned that doing so would drive up costs, force them to raise consumer prices, and perhaps compel some firms to shut down altogether.

"We hope each side is now prepared to go the last mile to achieve a high-standard, comprehensive, enforceable agreement," Myron Brilliant, head of international affairs for the U.S. Chamber of Commerce, said after Trump and Chinese President Xi Jinping agreed to resume talks following an impasse earlier this year that prompted the White House to more than double duties on some $200 billion in Chinese goods.

American negotiators are demanding Beijing stop requiring U.S. companies to share trade secrets as a condition of doing business in China and further open the country's markets.

"If China makes the necessary commitments, the administration should take the necessary steps to lift tariffs that are harming U.S. manufacturers, farmers, and consumers," Brilliant added.

Aside from China, talks with other trading partners have likely been hurt by the White House's threat to impose 25% duties on Mexican imports if that country doesn't curb illegal immigration across the southern U.S. border to Trump's satisfaction, BlackRock said.

Not only did the move follow renegotiation of the Clinton-era North American Free Trade Agreement with Mexico and Canada, critics said it leveraged trade policy to force concessions on an unrelated matter.

"We see the U.S.-Mexico trade relationship as durable but believe the recent U.S. threat to impose tariffs on imports dims prospects" for Congress to approve the new U.S.-Mexico-Canada Agreement before the 2020 presidential elections, Donilon said.

It also "reduces incentives for other countries to negotiate trade agreements with the U.S.," he added. "Global trade tensions could rise further if the U.S. implements tariffs on imported autos and parts from Europe or Japan — or resorts more often to tariffs to achieve political goals."

Such tension is among the reasons the Federal Reserve has signaled it may cut short-term interest rates later this year, an action Trump has long sought. The central bank's refusal to do so yet has prompted the president to berate the Fed publicly and lambaste Chairman Jerome Powell, whom Trump himself appointed.

"If the Fed knew what it was doing, they would lower rates," Trump said Sunday. Had the central bank not raised interest rates seven times in the first two years of Trump's term, or even approved only half the hikes, the Dow Jones Industrial Average would be 5,000 to 10,000 points above its current level of about 26,700, he argued.