Title: The U.S.-China Trade War’s Global Economic Impact
Headings: A $600 Billion Bill: Counting the Global
Cost of the U.S.-China Trade War

A $600 Billion Bill: Counting the Global
Cost of the U.S.-China Trade War
Scenario 1: Current Tariff Levels
Scenario 2: Escalation to 25% Tariffs on All Bilateral Trade
Scenario 3: Tariff Escalation Plus Equity Market Shock
Global Risk From the U.S.-China Trade War 👆
Industries Most Exposed to Chinese Exports
Industries Most Exposed to U.S. Exports
National Currencies Vulnerable to Re-Pricing 👆

Content: Bloomberg economists Dan Hanson and Tom Orlik have mapped out the main scenarios. Their headline conclusion: If tariffs expand to cover all U.S.-China trade, and markets slump in response, global GDP will take a $600 billion hit in 2021, the year of peak impact. On May 10, the U.S. took tariff rates on $250 billion of Chinese exports to 25%. Retaliation was swift, with China raising tariffs on certain U.S. goods in a range from 5% to 25%. Two years out, Bloomberg Economics’ modelling suggests that output in China and U.S. would be lower by 0.5% and 0.2% respectively, relative to a no-trade-war scenario. Global output would also come down a notch. Scenario 1: Current Tariff Levels
Percent impact on quarterly gross domestic product
China
U.S.
World
2018 2018 2019 2019
2019
2019 2020 2020
2020
2020 2021 2021
2021
2021 2022 2022
2022
2022
−1.0 −0.8 −0.6 −0.4 −0.2
2018 2018 2019 2019
2019
2019 2020 2020
2020
2020 2021 2021
2021
2021 2022 2022
2022
2022
−1.0 −0.8 −0.6 −0.4 −0.2
2018 2018 2019 2019
2019
2019 2020 2020
2020
2020 2021 2021
2021
2021 2022 2022
2022
2022
−1.0 −0.8 −0.6 −0.4 −0.2
What about if tariffs increase? The U.S. has threatened 25% tariffs on all Chinese imports if a quick deal can’t be achieved.