Global macro research

Trade wars

August 2019

The global trade war has negatively impacted trade volumes and appears to be a key driver of the slowdown in the global economy. How the conflict evolves and the impact of future flashpoints is likely to be critical for global growth and investment strategies over the coming years.

We believe there is a low probability that the conflict between China and the US will be resolved in 2019, with the potential for further tariffs imposed between the two countries. European autos and an uncertain passage of the USMCA are both potential flashpoints. We outline our assessment of each of the most likely scenarios.

We also highlight six potential new areas which could be drawn into the trade war, creating further disruption:

  1. Export restrictions
  2. Import restrictions
  3. Reserve management
  4. Currency devaluations
  5. Company boycotts
  6. Restrictions on the movement of people



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