Any form of trade fragmentation would be detrimental to China’s economy, according to European Central Bank Chief Economist Philip Lane.
Speaking at a conference on macroeconomic effects of geopolitical uncertainty in Amsterdam on Thursday, Lane highlighted that research suggested substantial output losses even in cases of mild decoupling.
“What you see here is, under all scenarios China gets whacked,” he said.
Credit: ECB
The reelection of Donald Trump has increased risk of global protectionism. Trump’s campaign saw the former president pledge 60% tariffs on China and as much as 20% on everyone else — the biggest trade shock since the Smoot-Hawley Act that deepened the Great Depression of the 1930s.
Written by: Cagan Koc @Bloomberg
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