In an interview on CNBC Mr Roubini, a New York University economics professor, clearly makes the case that the US economy and the global economy are in sync and seeing solid growth. However, with talk of merchandise trade being interrupted by tariffs and sanctions, the well-balanced system of global growth that boosts optimism, and driven by the US, China and the EU, is showing signs of uneven growth. In fact, uneven growth patterns are starting to appear around the world and this is likely going to send mini shock waves around the world.
The rising interest rates in the US has caused some of these growth changes, especially in countries in Latin America and with larger economies such as Brazil. A trade war would surely have added impact to this very global and sometimes delicate trading system.
“It`s going to get worse given the rivalry between the US and China,” according to Mr Roubini. But it is important to note that we are in an environment of higher interest rates and a fiscal situation in the US, massive deficit spending during a period of economic expansion, that makes many of us feel uneasy.
There is more polarization, more instability in the global economy and with higher interest rates, the global economy is somewhat more fragile. An all out trade war is not likely nor is it wanted. Surely the US and China will avoid this issue to escalate in the coming months.