New US tariffs on Chinese goods could deal another flow to the the largest economy in Asia, as the PPC pulls all of its levers to keep China Inc. moving forward. Chinese authorities have used both monetary and fiscal policies to limit the economic damage brought on by the US tariffs – which continue to expand. China is now in a war of words and a trade war that will surely test the 6.2% second quarter GDP for this year, the weakest rate in China growth in 27 years.
Growing US-China tensions and slowing Chinese and European economies are putting global recession on the table, according to Bruce Kasman of JP Morgan, one of their economists. He spoke on CNBC, this week. From September 1, there will be an additional 10% tariff on $300 billion of Chinese goods. Kasman said there is a 40% chance of global recession in the next six to nine months.
Trade conflicts, business confidence and policy uncertainty are all weighing in and the next recession may be just six months away. China and the US will surely be jockeying for position in the next 5 to 10 years for leadership in Asia and the world.