When we sit back and look at the IMF, the International Monetary Fund, we see an institution that is liked for many reasons but in the end, it gives information that some countries do not want to hear. In the case of China, the IMF is stating the obvious, it is saying that GDP is fading as a result of the US-China Trade War. The 2019 growth forecast from the IMF, according to CNBC Evelyn Cheng, was lowered to 6.2% from 6.3% on Wednesday. This comes as the direct impact of the tariffs placed on Chinese goods by the White House is now becoming apparent.
The same 2019 period was also discussed by Morgan Stanley when they called for a GDP level of 6.4% down from 6.5% in their previous forecast. The trade friction has taken a turn for the worse, as of May, the Trump administration has increased tariffs on $200 billion worth of goods. And keep in mind the the US is applying pressure to an economy that is already slowing.
The key now is that there is no discussion about trade but sources are now saying that US Secretary Steven Mnuchin and People`s Bank of China Governor Yi Gang could meet this weekend. Also, with G20 meeting at the end of June in Osaka, Japan, about 3 hours by bullet train from Tokyo, there are whispers that President Trump and President Xi will be sitting down for talks.