The on-going trade war between the world largest economies is soon going to have very large repercussions and seemingly going to hit the trade growth. Or so it seems.
A very high rate trade war will be a major damper and will hit the trade growth across all the economies if there seems to be a trade war related to protectionism.
Why will it hit the global trade?
According to the Economist Intelligence unit which is better known as the EIU, the focus will soon shift to the ongoing dispute between China and the US and the deals for free trade will continue between the two countries, giving rise to free trade.
They are also of the view, that overall overall, protectionism will rise and will pave the way for the aversion of the trade war in the future and also the overall trade growth will continue to slow down.
How has the market been behaving?
The global trade market is overall getting the jitters and will be responsible for serious implications for the rest of the world.
The things are turning in America’s favor at least for now.
The US has a huge trade deficit with China and initially at least the curbs will benefit the American firms also.
How is the situation for India?
India is for the time being insulated from the trade war, but if the war continues it can have some serious implications for the Indian financial market.
Many are also of the view that the current off will most likely not translate into a full fledged trade war and will not have any immediate effect.
There are also 3 main concerns-
Overall the idea behind the effect is to minimize the effect overall and trade war is a no-win proposition for the same.
Also according to the further assumption of the EIU, a mild recession is likely in the United States and in the year 2020,and that the world should be insulated from the subdued economic activity at this time.