Another bank turns gloomy on ‘trade war’

Bloomberg

Berenberg, Germany’s oldest bank, has given up hope that US-China trade tensions will subside any time soon — with severe consequences for
export-reliant nations.
Economists slashed their 2020 growth forecasts for countries including Japan, Germany, France, Italy and the United Kingdom. They expect the euro area will expand by just 0.9%, down from 1.4% predicted only a few months ago. That would be the worst performance for the
19-nation region since 2013.
The dire warning follows a similarly downbeat assessment by Commerzbank, which overhauled its outlook last week and said it no longer expect China’s stimulus programme to translate into significantly faster expansion.
“Following the recent severe escalation, we no longer assume that the US-Chinese trade war will be defused at least somewhat by a partial deal within the next six months,” Berenberg’s Chief Economist Holger Schmieding and his London-based team said in a note.
“Continuing trade tensions prolong the downturn in global trade and industry until at least spring 2020.”