A global economic recovery will come much later than expected and at a much slower pace, UBS was quoted as saying in a recent CNBC report.
UBS's global head of economics and strategy researcher Arend Kapteyn predicted that global growth—now at 2.6% on an annualised basis—wouldn’t get better in the next three quarters, according to the report.
“Actually, we are going to hit a bit of an air pocket in the first half of next year because we are still actually seeing these existing [trade] tariffs feeding their way into the data,” he was quoted as saying.
Both the US and China have imposed tariffs on billions of dollars’ worth of goods since 2018 when the trade war between the two countries started.
On Thursday, White House economic adviser Larry Kudlow said that negotiations over the first phase of a trade agreement with China were coming down to the final stages, with the two sides in daily contact.
China’s Ministry of Commerce reiterated on Thursday that the interim trade deal would depend on the US removing some—if not most—of the tariffs already imposed.
Unless a deal is reached before December 15, the US is set to impose a new 15% tariff on about US$156 billion of Chinese goods.
According to the report, UBS’ Kapteyn warned that a limited trade deal would not help create a global economic recovery. “Economically nothing snaps back even the two countries secure a limited trade agreement over the coming weeks,” he was cited as saying.