U.S. Outlook: China trade fight takes center stage

Scott Anderson
Chief Economist

U.S. stock declines slowed after heavy losses overnight in Asian and European equity markets in reaction to the Trump administrations $50B tariff announcement against China.

Graph showing amount of U.S. steel imports, by countryChina responded swiftly overnight, rolling out tariffs of its own on 128 products, or $3B of U.S. imports, including California wine, fruit, and almonds.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on March 23.

Key observations:

  • China has also warned it would take legal action at the WTO.
  • I would not describe this trade dispute as a full-blown trade war at this stage, but it is certainly an opening salvo in what could become one.
  • Early estimates put the negative impact on U.S. and global GDP growth around 0.1 percentage points of real GDP at most, so far.
  • This trade dispute might not stay in the trade realm. China could retaliate financially, by reducing its purchases of U.S. Treasury bonds.


Read my full report.

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