Trade War Tops List of Global Risks, Oxford Economics Says

(Bloomberg) -- Go inside the global economy with Stephanie Flanders in her new podcast, Stephanomics. Subscribe via Pocket Cast or iTunes.

The fate of the global economy lies in the hands of Washington and Beijing.

That’s the view of Oxford Economics, which found that the top risk is the trade dispute damping growth. The slowdown in China and a U.S. recession ranked second and third in the Global Risk Survey.

Since the poll of 189 businesses was conducted before the latest round of duties on Chinese goods threatened by U.S. President Donald Trump, the figures may actually understate the risk companies see.

Bloomberg’s own economists calculate that a 25 percent tariff on all imports from China would shave 1.5 percentage points off U.S. growth -- a cut that would halve the rate seen in the first quarter. Trump’s backers argue the sacrifice is worth it in the context of what they see as an existential innovation war with an increasingly muscular China.

©2019 Bloomberg L.P.