JP Morgan says new US tariffs will test China’s ability to prop up its economy

JP Morgan says new US tariffs will test China’s ability to prop up its economy

President Donald Trump meets with China’s President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan, June 29, 2019. Kevin Lemarque | Reuters New U.S. tariffs on Chinese goods could deal another blow to the Asian economic giant — and it’s not clear how much more Beijing can do to prop up its economy, an economist from J.P. Morgan said on Friday. Since the ongoing tariff fight between Washington and Beijing started about a year ago, Chinese authorities have used both monetary and fiscal policies to limit the economic damage brought on by elevated U.S. tariffs. Those measures have worked to some extent, according to Bruce Kasman, chief economist and head of global economic research at the investment bank. “I think it’s encouraging to see they’ve been moving on multiple fronts, it’s encouraging to see that it’s having some effect on the economy,” he told CNBC’s “Squawk Box.” “But boy, we just haven’t seen how far the latest damage is going to be,” he added. I think we have a heightened risk of recession. I think the reason is that we’re seeing the intensification of the big drag in the global economy this year… Bruce Kasman chief economist at J.P. Morgan U.S. President Donald Trump earlier this month announced that from Sept. 1, an additional 10% tariff will be applied on $300 billion of Chinese goods. But the United States Trade Representative Office later removed some items from its list of […]

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