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AdvertisementUS-China trade warBusinessTariff hikes won’t affect US, which is poised for longest period of economic growth since 1785, says Indosuez economistIf they do go up, levies will be
rising from record low level, says Marie Owens Thomsen, global head of investment intelligence at Indosuez Wealth Management, the private banking arm of Credit Agricole GroupReading Time:3
minutesWhy you can trust SCMPEric NgPublished: 8:07pm, 12 Feb 2019Updated: 10:56pm, 12 Feb 2019 The United States, the world’s largest economy, is poised to see its longest period of
economic growth since 1785, if there is no recession through July this year, according to Marie Owens Thomsen, global head of investment intelligence at Indosuez Wealth Management, the
private banking arm of French financial services firm Credit Agricole Group.
Advertisement Tariff hikes from its trade war with China are unlikely to tip its economy into recession, as long as its trading volume keeps growing, she said. The previous longest US
expansion was 120 months long, between March 1991 and March 2001. By July, the current economic upcycle will have lasted 121 months.
United States to remain sole global economic superpower until 2035, Chinese government think tank says “One thing that is protecting us from a recession is that although we are talking about
higher tariffs, they are rising from a record low level,” she said. “Even if they double the tariffs, they will still come nowhere close to our historical experience.”
In 2017, tariffs amounted to just 1 per cent of all imports to the US and 5 per cent of its dutiable imports, far lower than an average of 60 per cent in the early 1930s, when the US
suffered from a long and deep economic depression.
Global trade volume growth slowed from 4 per cent in 2017 to an estimated 2 per cent last year, said the economist, who also forecast global economic growth to decelerate to 3.2 per cent
this year and 3 per cent next year from 3.4 per cent in 2018 and 3.6 per cent in 2017.
Advertisement Owens Thomsen’s comments stand in contrast with those of Nobel Prize-winning economist Paul Krugman, who on Sunday told Bloomberg TV that the US “seems pretty likely” to see a
recession in the next two years, a view shared by most US chief financial officers in a Duke University survey published in December 2018.
Krugman said lack of consumption in China and weak growth in Europe were the biggest risks to the global economy. Italy, the third-largest economy in the euro zone, slipped into recession in
the final three months of last year.
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