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Is the trade war that bad?


  • Economy
  • Trade




Trade tensions and recent tariffs are not about to bring down the economy, ANZ’s Chief Economist tells DCM conference.



Heightened trade tensions between the United States and China - and the resultant tariffs - are a big deal, according to ANZ Chief Economist Richard Yetsenga. But they’re unlikely to be the thing that brings the global economy crashing down.

Speaking on a panel at ANZ’s 2019 Debt Conference in the Hunter Valley, Yetsenga said in his view the tariffs, which affect less than 4 per cent of global trade, are not the doomsday scenario many suspect.

“It's just not conceivable the impact of tariffs is going be the thing which destroys the global trade cycle,” he told delegates at the conference.

“It doesn't look like the trade issue is going to disappear. I just don't think it's the thing that's going to bring the cycle unstuck.”

You can listen to his comments on the podcast below.



“It doesn't look like the trade issue is going to disappear. I just don't think it's the thing that's going to bring the cycle unstuck.”


Yetsenga said 12 months ago the very suggestion of a trade war was seen as crazy but now was seen in some circles as “the thing that's going to ruin us”.

“The global economy - and domestically in fact - faces some serious structural issues,” he said. “But if you follow the popular narrative this time last year the structural issues didn't exist.”

“I think the reality actually is somewhere in the middle.”

Yetsenga conceded export growth was negative in some countries but said history suggests only a big problem – such as the global financial crisis or the dot.com bust – would see that last for an extended period.

“Is it conceivable that tariffs… are the big thing that's going to bring the global trade cycle unstuck?” he said. “It's not to me.”

Shane White is Content Manager, Institutional at ANZ



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