Everybody Loses In A Trade War, Says Nouriel Roubini

As trade tensions escalate between the world’s two biggest economies, Nouriel Roubini, professor at New York University says, the situation will not just have implications on the stock market, but could damage the American economy.

“I have a slightly pessimistic view because the economic nationalists are in and those who are internationalists are out,” Roubini told Bloomberg in an interview.

The Donald Trump administration’s dispute with China and the retaliations thereof, have triggered a selloff in financial markets. “Already, $3 trillion of national wealth in the equity market have been wiped out by statements and actions on China”, Roubini pointed out, adding “discipline is going to eventually come from the markets.”

President Trump on Thursday instructed the U.S. Trade Representative’s Office to consider tariffs on an additional $100 billion in Chinese imports, bringing to $150 billion the range of Chinese goods under consideration. China, which already proposed duties on $50 billion in American goods —including aircraft and soybeans—after the first U.S. move, has said it will respond proportionately, Bloomberg had reported.

This situation could escalate in a full scale trade war eventually, and the “U.S. rightly or wrongly feels that the rise of china is going to be a threat to the U.S. economy and security”, Roubini noted.

Watch the entire conversation here:

Also Read: U.S.-China Tensions Simmer While Both Say There’s No Trade War