Trade war's influence on global economy and business environment

This report analyzes the impact of trade wars, particularly between China and the U.S., on the global economy. It references an article discussing the potential for a 'shipwreck' scenario due to escalating trade tensions. The report highlights the slowdown in capital goods orders, manufacturing, and global trade, along with a decline in business investments across the G7. It also mentions the impact of Brexit and the uncertainty caused by new tariffs, leading to pressure on central banks to lower interest rates. The report references the concerns about the economic outlook and the actions taken by the U.S. and China that intensify the situation. The study explores how the G20 is attempting to address these issues and the implications for the European Central Bank's monetary policies.

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Trade wars could shipwreck global economy, warns Mark Carney
Link: https://www.theguardian.com/business/2019/jul/02/trade-wars-could-shipwreck-global-
economy-warns-mark-carney
This article illustrates the fact about what Trade war between China and US could do on
world economic condition which is already suffering. The governor of the “Bank of England”
warned about a shipwreck like condition of world economy if China and U.S. keep
underestimating the impact of trade war. The uncertain environment of trade is leading to
slowdown in capital good order, manufacturing, global trade and industrial productions.
Along with this throughout the G7, the growth rate of business investments have almost
halved which resulted in making global expansion more focused towards customer’s
spending and reduction in its resilience. The quality of the global growth rate has
deteriorated. The condition of UK post Brexit decision has increased the uncertainty to
further higher levels (Inman, 2019).
The article also represents the way in which households have become gloomier about the
general economic outlook. U.S. president threatened fresh tariff on European products hence
increasing the uncertainty to further higher levels. In the G20 China and U.S. is going to
discuss the issues but nothing seems to be ending at happier note. The latest actions by both
the government to impose fresh tariff have increased the tension to become far more
damaging, pervasive and persistent than previously expected. This is increasing the pressure
on the central banks in the economies that are already affected by the slowing growth so as to
cut interest rates this year. European central bank has already signalled that there is a fall in
the growth and inflation in the European region and hence aims to keep the interest rates to
historic low.

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References
Inman, (2019) Trade wars could shipwreck global economy, warns Mark Carney. The
Guardian. Retrieved from: https://www.theguardian.com/business/2019/jul/02/trade-
wars-could-shipwreck-global-economy-warns-mark-carney.