Economics
U.S.-China Trade War Would Take a Bite From Both Economies
- Tit-for-tat tariffs would lift inflation, depress output
- All bets are off if a full scale trade conflict breaks out
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A trade war between the U.S. and China probably would take a bite out of the world’s two-largest economies but wouldn’t do enough damage to pitch either into recession, provided it’s contained.
The nations would suffer a material reduction in output from the disruption in trade and higher prices that would result from a tariff battle, economists say. The damage could be compounded if the back-and-forth moves trigger a confidence-sapping swoon in global stock markets.