In this Sept 29, 2018 photo, the US flag flies over Chinese shipping containers that were unloaded at the Port of Long Beach, in Los Angeles County. A number of US business economist appear sufficiently concerned about the risks of some of President Donald Trump's economic policies that they expect a recession in the US by the end of 2021. (MARK RALSTON / AFP)
WASHINGTON — A number of US business economists appear sufficiently concerned about the risks of some of President Donald Trump's economic policies that they expect a recession in the US by the end of 2021.
Thirty-four percent of economists surveyed by the National Association for Business Economics (NABE), in a report being released Monday, said they believe a slowing economy will tip into recession in 2021
Thirty-four percent of economists surveyed by the National Association for Business Economics (NABE), in a report being released Monday, said they believe a slowing economy will tip into recession in 2021. That's up from 25% in a survey taken in February. Only 2% of those polled expect a recession to begin this year, while 38% predict that it will occur in 2020.
The economists have previously expressed concern that Trump's tariffs and higher budget deficits could eventually dampen the economy.
The Trump administration has imposed tariffs on goods from many key US trading partners — from China and Europe to Mexico and Canada. Officials maintain that the tariffs, which are taxes on imports, will help the administration gain more favorable terms of trade. But US trading partners have simply retaliated with tariffs of their own.
Trade between the US and China, the two biggest global economies, has plunged. Trump decided last Wednesday to postpone until Dec 15 tariffs on about 60% of an additional US$300 billion of Chinese imports — granting a reprieve from a planned move that would have extended duties to nearly everything the US buys from China.
The financial markets signaled the possibility of a US recession last week, adding to concerns over the ongoing trade tensions and word from Britain and Germany that their economies are shrinking.
The economists surveyed by the NABE were skeptical about prospects for success of the latest round of US-China trade negotiations. Only 5% predicted that a comprehensive trade deal would result, 64% suggested a superficial agreement was possible, and nearly one quarter expected nothing to be agreed upon by the two countries.
The 226 respondents, who work mainly for corporations and trade associations, were surveyed between July 14 and Aug. 1. That was before the White House announced 10% tariffs on the additional US$300 billion of Chinese imports, the Chinese currency dipped below the seven-yuan-to-US$1 level for the first time in 11 years, and the Trump administration formallylabeled China a currency manipulator.
As a whole, the business economists' recent responses have represented a rebuke of the Trump administration's overall approach to the economy.
Still, for now, most economic signs appear solid. Employers are adding jobs at a steady pace, the unemployment rate remains near a 50-year low, and consumers are optimistic. US retail sales figures out last Thursday showed that they jumped in July by the most in four months.
The survey showed a steep decline in the percentage of economists who found the US$1.5 trillion in tax cuts over the next decade "too stimulative" and likely to produce higher budget deficits that should be reduced, to 51% currently from 71% in August 2018.
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