Goldman Sachs economists say fears rise that U.S – China trade war leading to recession

Goldman Sachs economists say fears rise that U.S – China trade war leading to recession

August 11 Reuters, – Goldman Sachs Group Inc (GS.N) said on Sunday that fears of the U.S – China trade war leading to a recession are increasing and that Goldman no longer expects a trade deal between the world’s two largest economies before the 2020 U.S. presidential election.

We expect tariffs targeting the remaining $300 billion of US imports from China to go into effect, the bank said in a note sent to clients.

U.S President Trump announced on 1st August that he would impose a 10% tariff on a final $300bn worth of Chinese imports on 1 September, prompting China to halt purchases of U.S agricultural products.

The year-long trade dispute has revolved around issues such as tariffs, technology, subsidies, intellectual property, and cyber-security, among others.

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Goldman Sachs said it lowered its fourth-quarter U.S growth forecast by 20 basis points to 1.8 % on a larger than expected impact from the developments in the trade tensions.

Overall, we have increased our estimate of the growth impact of the trade war, the bank said in the note authored by three of its economists, Jan Hatzius, Alec Phillips and David Mericle.