Trade war: so far everything is going well for growth, but…

Donald Trump in the oval office of the White House, June 27, 2017 (Photo NICHOLAS KAMM. AFP)

The United States on Friday announced new sanctions against China, which promises in turn to retaliation: the global growth, which has stood for the moment of the trade tensions, could make the costs of escalation.

Washington will impose new tariffs, by 25%, on $ 50 billion of chinese imports, with technologies very important on the industrial plan”, said the president Donald Trump in a press release.

In recent months, leading indicators have revealed the concerns. The morale of German investors, as measured by the institute ZEW, for example, has clearly failed in June, falling back to its lowest level since 5 years.

The director of the world trade Organization (WTO), Roberto Azevedo, has confirmed these early signs of worry: “there is a reluctance to invest and it is also seen in the purchasing behavior of enterprises,” he said this week in the German daily Handelsblatt.

Adam Slater, senior economist at Oxford Economics, has, however, minimized the impact on the growth… for the moment. “The slowdown observed in the trade figures probably has no direct link with these protectionist measures”, he explained.

He, however, hastened to prevent an “escalation” that could “strengthen the slowdown”, as has been already told, the Organization of economic cooperation and development (OECD) at the end of may, when she was called on the countries to avoid a trade war is not to undermine a recovery that has finally reached its pre-crisis level.

These risks come at a time when the global economy begins to suffer as the rebound in oil prices and especially rising rates in the u.s., which complicates the situation of emerging countries such as Turkey and Argentina, incapable of halting the collapse of their currency.

– A Europe insulated

An escalation between the United States and China would only worsen the situation: “if this was degenerating into a trade war, it could have an impact much greater concern,” said Benoît Coeuré, member of the executive board of the european central Bank, on Europe 1.

In the meantime, “it is all the functioning of the global economy, which is to review and a Europe that finds itself a bit lonely in the game world”, he commented.

A trade war is open, with a Donald Trump putting his threat of taxing imports of car for example, falls at a bad time for the european economy, which began to weaken after returning to a strong growth last year.

The president of the ECB, Mario Draghi, has reviewed Thursday to lower its growth forecast for the euro zone this year to 2.1% from 2.4% previously, but refused to attribute this slowdown to Mr. Trump.

“The direct consequences have been limited so far,” he pointed out.

In Germany, most of the indicators – exports, investor sentiment, production and industrial orders – have markedly deteriorated since the beginning of the year.

The Bundesbank has lowered sharply its forecasts on Friday and not table more than on 2% growth this year, up from 2.5%.

In the United States, where the economy carbide at full regime, the threats of Mr. Trump also concerned about: the beige book of the u.s. central bank (Fed), made public at the end of may, has echoed the “uncertainties within companies in the United States”.

Its chairman, Jerome Powell, has certainly acknowledged Thursday that “the concerns increased about the changes of commercial policy,” but he immediately recalled that the american economy was the best in this moment.

In China, paradoxically, trade tensions have had an effect dopant for the activity.

Manufacturing activity accelerated in may, unexpectedly, at its fastest pace in eight months, and exports from china have climbed 12.6% year on year in may, with a jump of 11.6% to the United States alone

“It may simply mean that exporters have advanced the shipping of their products” to avoid disruptions of supply, or customs barriers in the case of increased trade tensions, observed in the last month Betty Wang, an analyst at ANZ.

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