Whoever wins the bitter trade dispute between the world’s two largest economies – the US or China – the consequences will extend far beyond and can eliminate up to $600 billion, according to a Bloomberg forecast. Similar losses are expected in 2021. This year will be the climax of the consequences of the trade conflict, experts believe.
Some analysts anticipate that by 2021, the US GDP will lose 0.5%, and the Chinese economy will sink by 0.8% because of the trade war. If the trade conflict unfolds further, a collapse in the stock markets by at least 10% is highly likely, analysts emphasize. As a result, the GDP losses will amount to an additional 0.1% for each of the parties.
The worst blows from a drop in China’s exports to the US would fall on Taiwan, South Korea, and Malaysia, Bloomberg economist Maeva Cousin noted. Such industries as energy and metal production will be undermined. What’s more, the US-China conflict will affect the most overvalued currencies, including the Chinese yuan, the Thai baht, and the Canadian dollar.
According to the Federal Reserve Bank of New York, the rise in commodity prices will cost the average American $211. In addition, the Americans will lose another $620 due to lower productivity in the economy. Last year, trade disagreements with China cost the American citizens almost half as much - $414, the Fed pointed out.