Among major economies, Australia sent 35%
of its exports to China in April, Brazil 30% and
South Korea 24%, according to the Peterson
Institute for International Economics.
Besides hurting countries that export raw
materials to Beijing, the Chinese slowdown
could come back to squeeze American
companies like Procter & Gamble and General
Motors that sell into the vast Chinese consumer
market. Slowing demand in China could depress
their revenue, earnings and stock market
value, said Mary Lovely, a Syracuse University
economist who studies trade.
Eventually, weaker stock prices could undermine
U.S. consumer confidence and the American
economy, she said.
“President Trump is probably happy that he’s
starting to tank the Chinese economy,” Lovely said.
“But it’s a case of ‘be careful what you wish for.’ ”
IHS Markit foresees world economic growth
slowing this year to 2.8% from 3.2% in 2018.
A decelerating “China is certainly part of that,”
said Sara Johnson, IHS’ executive director for
global economics.
But the world faces other problems, too. For one
thing, Trump’s tariffs on imports from a host of
countries — and the retaliation they have drawn
from America’s trading partners — are crimping
world trade and investment.
Manufacturers worldwide are also sitting on
unsold stockpiles of goods, and growth will likely
slow as they pare their inventories, Johnson said.
Trump and President Xi Jinping agreed last
month to resume negotiations in a fight that has
battered both American and Chinese exporters.
But economists warn their truce is fragile
because they still face the same array of disputes
that caused talks to break down in May.
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