The Trade War Isn’t to Blame for the Global Slowdown

October 28, 2019

Since the trade war began, much of the global economic slowdown has been attributed to the impact of the increased tensions between the U.S. and China. However, a new article from the Economic Research Cycle Institute points out that the global economy was heading for a downturn well before the trade war kicked off.

ECRI points out that global industrial production started slowing in late 2017. In fact, their leading production indexes began to signal a downturn as early as mid-2017. While ECRI acknowledges that the trade war has exacerbated the downturn, the slowdown was simply the next stage in the global economic cycle. Many assume that economic growth will simply continue apace until some event changes things. The reality is that there are natural peaks and valleys to the economic cycle. Analysts and media pundits attempt to make sense of this ebb and flow by attributing it to external events.

The good news, according to the ECRI, is that if the global slowdown was not caused by the trade war, then growth can be revived even if the trade war does not end.

Read all Blog posts