Some economist from the United States of America have predicted a recession in the US if the trade war between their country and China persists.
A strong majority of economists in the US in a poll by Reuters put the chances of a recession happening in the next two years at 40per cent.
That is up from a median 35 per cent in last month’s poll, the first time it had dipped slightly from where it held since December last year, before a crushing sell-off on Wall Street as 2018 came to a close.
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U.S. President Donald Trump has dismissed the ongoing trade war with China as a “little squabble,” but there are clear signs of the conflict already having an impact on the economy, and the stock market has become jittery again.
“I have a hard time thinking of a scenario in which a further escalation of the trade tension we currently have would not make recession risk higher,” said Michael Hanson, head of global macro strategy at TD Securities.
“We are already in a situation where the level of tariffs that are either imposed or threatened to be imposed over the next several weeks are really quite high and a move to basically putting tariffs of 25 per cent on everything we import from China is a very real drag in the economy,” said Hanson.
While only a single-digit percentage of respondents say a U.S. recession is likely in the coming year, more than one-quarter of economists polled see a greater than 50 per cent probability of recession within two years.