The US-China trade war has always been serious. Now it's starting to get scary.
China allowed its currency to drop sharply on Monday to the weakest level in more than a decade. And China announced its companies have halted purchases of American agricultural goods. The Trump administration escalated tensions even further late Monday by taking the historic step of labeling China a currency manipulator. This comes after US President Donald Trump vowed last week to impose tariffs for the first time on a wide swath of US consumer goods from China.
The trade conflict has reached a new level of seriousness that will be difficult to reverse. The risk is that the trade war is approaching the point at which it causes a severe economic slowdown or even a recession. By digging into their positions, both the United States and China increase the risk of breaking an economy that is already starting to crack. Each round of escalation gets them closer to a recession — and to a point of no return.
China allowed its currency to drop sharply on Monday to the weakest level in more than a decade. And China announced its companies have halted purchases of American agricultural goods. The Trump administration escalated tensions even further late Monday by taking the historic step of labeling China a currency manipulator. This comes after US President Donald Trump vowed last week to impose tariffs for the first time on a wide swath of US consumer goods from China.
The trade conflict has reached a new level of seriousness that will be difficult to reverse. The risk is that the trade war is approaching the point at which it causes a severe economic slowdown or even a recession. By digging into their positions, both the United States and China increase the risk of breaking an economy that is already starting to crack. Each round of escalation gets them closer to a recession — and to a point of no return.
