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Opinion
Ferdinando Giugliano

How the U.S.-China Trade War Could Wallop the Financial System

Protectionism has central bankers loosening monetary policy, which pushes investors to take bigger risks.

Here comes the systemic risk.

Here comes the systemic risk.

Photographer: Joe Raedle/Getty Images

Since the beginning of the trade war between China and the U.S., most economists have warned that rising protectionism would trigger an economic slowdown. A few years into this conflict, the evidence suggests that a deceleration is indeed taking place.

This week, the International Monetary Fund warned that global growth will fall to 3% this year, the lowest rate since the financial crisis, as the tit-for-tat between Washington and Beijing takes its toll on confidence and investment.