Trade policy uncertainty is increasing, posing a downside risk to global growth

From Investing.com: 2024-06-30 04:01:01

Goldman Sachs economists warn that a potential Donald Trump victory could lead to significant tariffs on U.S. imports, resulting in retaliation. Trade policy uncertainty indices have surged, posing a moderate downside risk to global growth. During the 2018-2019 trade war, companies reduced investment, with a 0.5 percentage point decrease in U.S. investment growth. Equities exposed to trade risk also saw reduced investment, impacting growth in major economies. If trade policy uncertainty reaches 2018-2019 levels, GDP growth could decrease by 0.3pp in the US and 0.9pp in the Euro area, affecting growth in 2024H2 and 2025.



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