The trade war waged against various countries by the U.S. like China, Europe and Mexico is harming global investment, says a report from World Bank.
The World Bank report predicts that there would be a dip in worldwide growth in 2019 that would touch low levels not seen since 2016.
The policy uncertainty index from World Bank has touched a record high. The tariffs imposed by the Trump administration and the Brexit uncertainty are two critical issues that will definitely harm the global scenario, claims the report.
Fed Chairman Jerome Powell has also said echoed the same thoughts in his speech on Tuesday. He has said that appropriate measure has to be taken to protect the U.S from all harm from the trade tariffs.
Further, Powell has also hinted that interest rate cuts may be coming in the following months, in a conference held at Chicago. The central bank is closely watching all the happening caused by the trade dispute, he says.
China and the U.S. have been hitting tariffs on each other’s imports. This has caused the stock markets to slide the whole of last month.
Mexico has been warned by the U.S. that higher tariffs would be imposed if migration was not curbed. 5 percent tariffs would be imposed within a week and it would be increased to 25 percent by October, warns President Trump.
The Brexit uncertainty has been prolonging for a very long duration and this has slowed down the growth of the European Union.
The oil market has slumped with lower prices with the escalating trade war and the global slowdown hitting all countries.
World Bank group president David Malpass says that the economic momentum currently seen is very weak. This will increase debt levels and decrease investment growth.
Malpass has said that structural reforms have to be taken to boost the business climate and improve investment levels.